India’s top bankers have warned the government that failure in the debt-bruised telecom sector could result in defaults in the industry whose total borrowings amount to a Rs 8 lakh crore. This happens to be more than double the direct exposure banks have made to this sector as disclosed in the Reserve Bank of India’s data.
In a recent presentation to the cabinet secretary that came days before the RBI imposed higher provisioning by banks even on regular telecom loans, banks said using spectrum as a collateral and extension of spectrum repayment schedule may be needed to salvage this sector.