RBI Seeks Moratorium On AGR For Telcos To Safeguard Banks

The Reserve Bank of India (RBI) has reached out to the government to protect the interest of lenders that have exposure to telecom companies that might be affected by the Supreme Court ruling on the issue of adjusted gross revenue (AGR), according to a report.

“RBI has asked the government to consider a moratorium on the AGR,” ET NOW reported on January 17.

When contacted, the central bank spokesperson declined to comment on the same.

An analyst report by UBS said that lenders like YES Bank, IndusInd Bank, State Bank of India, ICICI Bank and Punjab National Bank appear to have high exposures to Vodafone Idea.

As on September 2019, SBI’s total exposure to the telecom sector stood at Rs 35,735 crore, of which Rs 9,327 crore was classified as bad loans. Over 70 percent of its standard portion was towards private telecom companies.

The report comes a day after the apex court rejected an appeal by wireless carriers to review $13 billion they owe to the government. This raises concerns for lenders that have exposure to these companies, the report said.

Last month, Aditya Birla Group chairman Kumar Mangalam Birla had said that Vodafone Idea would have to shut shop if there was no relief from the government on AGR.

“The company has no source of cash to pay the liabilities and was entirely dependent on payment relief. It has cash merely to continue operations for the next 2-3 quarters,” Motilal Oswal Institutional Equities said in a report.

Telecom companies, including Vodadone Idea, need to clear dues of Rs 1.47 lakh crore by January 23.

According to RBI data, total outstanding loans to the telecom sector stood at Rs 1.31 lakh crore, as on November 2019.―Money Control