Losses to Telecom Companies increase Banks’ Tension, Fear of Default

India's two largest telecom companies Airtel and Vodafone-Idea have suffered the biggest losses so far. Large banks of the country are frightened by this condition of telecom companies.
Losses to Telecom Companies increase Banks’ Tension, Fear of Default

The results of the second quarter of the two big telecom companies of the country – Airtel and Vodafone – were released recently. In these results, both companies have incurred the biggest loss so far. In such a situation, now the tension of banks lending to these companies has increased. In fact, due to the already non-performing asset (NPA), the banking sector under stress is likely to default. There will be a danger of increasing NPAs of banks by default. In addition, the mutual fund industry may also be affected.

Preparation to end Banking Industry!
During a conversation with Business Today, a banker said on condition of anonymity, "It is not just a question of loss of a company." Under this, preparations are on to end the banking industry. The outstanding loan amount and bank guarantee given by the telecom companies to the Department of Telecommunications (DoT) is large. "

The banker further said, "The government approves the default or opens a new way, now the ball is in the government's court." The government should try to keep the probability of default to a minimum. "With this, the bank warned that if the default happens, we will not charge anything. Citing the example of Aircel and RCom, the banker said that they are struggling to recover the money. Meanwhile, Finance Minister Nirmala Sitharaman has said that no bank has expressed its concern to the Finance Ministry regarding the arrears on the telecom sector.

What is the matter?
Actually, the telecom companies owe more than 1 lakh crore rupees to the government. This outstanding on companies is made under Adjusted Gross Revenue (AGR). AGR is the usage and licensing fee charged by the telecom companies by the Department of Telecommunications (DoT) of the Ministry of Communications.

Explain that the telecom companies had approached the Supreme Court against the amount of this dues. But the Supreme Court had also accepted the government's demand. In such a situation, now the telecom companies will have to pay the outstanding amount. Now telecom companies are expecting relief from the government.

Meanwhile, Finance Minister Nirmala Sitharaman said that the government wishes to address the concerns of the telecom sector. Sitharaman said that the government's intention is to address the concerns of all those who are going through a huge crisis and who have approached the government. This talk of Finance Minister can give relief to telecom companies. Let us know that the two top telecom companies of the country- Vodafone- Idea have incurred a huge loss of Rs. Telecom companies say that the biggest reason for this loss is the adjusted gross revenue (AGR).

Related Stories

No stories found.
logo
Since independence
www.sinceindependence.com