1. SBI to make provisioning for stressed telecom sector

SBI to make provisioning for stressed telecom sector

SBI chairman Arundhati Bhattacharya on Saturday said the bank will make higher provisioning for the telecom sector, since it was undergoing stress.

By: | Kolkata | Published: September 24, 2017 5:41 AM
Arundhati Bhattacharya, SBI chairman, telecom sector, SBI management institute, kolkata, RBI, spectrum usage charges  The higher provisioning would impact the banks’ September quarter performance, merger of six banks with SBI would also have its impact on the results. (Reuters)

SBI chairman Arundhati Bhattacharya on Saturday said the bank will make higher provisioning for the telecom sector, since it was undergoing stress. The decision came in the wake of RBI ordering banks to make higher provisioning for the standard assets of the telecom sector and keep a close watch on it. The telecom industry has an outstanding debt of around Rs 4 lakh crore, incurred mainly on account of payments for spectrum, spectrum usage charges and other levies. The debt-stressed industry had written to the department of telecom, apprising it about the financial situation. As of September 2016, the total debt of listed telecom firms was at RS 2,14,477.17 crore.

The higher provisioning would impact the banks’ September quarter performance, merger of six banks with SBI would also have its impact on the results.  “Merger of the banks is a deep structural reform and we will deliver positive results in 3-4 quarters,” she said. On the NPA outlook, she expected the slippages to come down. “We have come to the end of the cycle. Government now needs to do some heavy lifting,” she said adding plans were getting off the table with a number of infrastructure projects being tendered out. Growth should come in a quarter or two. The markets should move up with the demand growing.

SBI on Saturday inaugurated the SBI management institute in Kolkata with a view to impart management knowledge among the banking personnel. Understanding and managing risk has become critical to the industry. There has been constant changes in regulation and compliance issues and the banking management needs enhanced focus on technology, analytics soft skill development, ethics and governance. People will be picked up from middle level management up to the top level to adopt newer skills for keeping pace with the dynamics of banking industry, Bhattacharya said.

  1. A
    Akash kumar
    Sep 25, 2017 at 2:37 pm
    also available related news on here : factsgrabber /business-2/telecom-sector-under-stress-sbi-chief/
    Reply
    1. V
      V K Agarwal
      Sep 24, 2017 at 12:55 pm
      SBI decision of higher provisioning against telecom is a good reflection of favouritism and raising fake public image by present telecom policy at the cost of killing a successful telecom sector through draining banking industry. Look wait for next wonder and / or magic..
      Reply
      1. A
        Apte
        Sep 24, 2017 at 9:22 am
        1. Who is worried about financial health of the telecom industry and in particular of (a) Bharti Airtel (BA), owner of Airtel b (b) Vodafone Idea Cellular which will be merged during next two years? We know how BA made huge profits for almost two decades from 1996 to 2015 or so. This was because BA faced little effective compe ion. But where did BA invest its super profits? It invested in a South African telecom venture and lost money heavily. 2. Here let us also not forget that till the entry of R Jio in the telecom services market these three companies were almost dictating terms to customers. 3. After entry of R Jio, overall environment has become very compe ive but BA Vodafone-Idea may feel that the telecom sector is a stressed sector. Is it so? Does it deserve any special incentives? There may be tariff wars for some time but ultimately after a huge expansion of digital services, I believe it will be a win-win situation for both telecom companies and their customers.
        Reply

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