Money & Banking

Unutilised credit limits to telcos not withdrawn: SBI

Our Bureau Mumbai | Updated on January 12, 2018 Published on June 09, 2017

SBI’s exposure to the telecom sector is minuscule. It is about 1.4 per cent of the bank’s total exposure on the fund-based side, says MD B Sriram

State Bank of India has not withdrawn unutilised credit limits to companies in the telecom sector, said B Sriram, Managing Director.

In response to media queries whether his bank had cancelled unutilised credit limits to telecom companies in view of the stress in the sector, Sriram said: “As regards withdrawal of unsanctioned limits, I don’t know from where the information is coming. We have not withdrawn any unutilised limits.

“As a matter of general practice or general banking soundness, we do review all the accounts, irrespective of which sector (including telecom) they belong to and we try and see that in terms of saving on capital, we do take informed decision to try and use limits where these are required. And that is about all.”

Sriram emphasised that SBI’s exposure in the telecom sector is minuscule. It was about 1.4 per cent (or about ₹18,000 crore) of the bank’s total exposure on the fund-based side.

“Post-merger, actually that reduces to less than 1 per cent. Of this, generally, at any point in time, about 70-80 per cent is utilised. But it can be utilised by one company and not be utilised by another,” he said.

SBI Chairman Arundhati Bhattacharya said even for unutilised limits, the bank needs to keep capital. “So, we have a cancellability clause for unutilised limits so that we don’t unnecessarily block up capital. There is a regular review that is taken and where the limits are unused for a period of time then we simply cancel it.

“The review has nothing to do with any particular account or any particular sector. It is something that is done universally for the large accounts and if we are seeing that there is non-usage (of sanctioned limit) for a very long period of time then those limits are cancelled,” she said.

Published on June 09, 2017
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