Mumbai: The Supreme Court’s decision that upholds the DoT demand is unlikely to have much material impact on banks. Bankers said except Jio, other telecom players have not borrowed from banks in the last one-and-a-half years while the existing stress-ed loans to the sector have been provided for.
However, analysts said that the Supreme Court decision comes as a major setback to the incumbent telcos as it implies higher payments when the industry is facing a price-war and intense competition. The payment terms for these liabilities would remain a key monitorable for the asset quality of banks as well as the debt servicing ability of telecom companies, they said.
“Around a year-and-a-half ago, the RBI had identified the telecom sector as stressed and had asked banks to make additional provisioning towards their exposure. Technic-ally, there has not been any borrowing from the telecom companies since then. Only Jio has borrowed from banks and it too has been bringing down the debt by monetising its assets,” said a banker.
