Rating agency Moody’s on Monday said the severity of losses to Indian lenders from the cancellation of 122 telecom licences issued in 2008 would be high, though not unmanageable.
Banks may face major losses from the $2-billion loans to borrowers in the telecom sector affected by cancellations. However, the exposures remain immaterial when considered in isolation and, therefore, were marginally credit negative for banks, said Vineet Gupta, vice-president and senior analyst, Moody’s rating services.
The Supreme Court had, on February 2, ordered the cancellation of all the 122 unified access service licences issued in January 2008.
The report follows growing concerns on asset quality, including recent woes of corporate borrowers in the broader telecom space and the power and airline sectors, Moody’s said. In November, Moody’s had revised its outlook for Indian banks from stable to negative. A slowdown in economic growth and a fall in the repayment ability of a few corporate borrowers would pose risks to asset quality.
