New Delhi:The Supreme Court in its ruling cancelled all controversial 2G licences. The Central Government is already eyeing for income and started the process to sell the cancelled 2G licences. But the banks which gave loans to companies for acquiring licences seem to be in trouble. Rs 28,000 crore of public and private banks are stuck with the companies whose licences have been cancelled.   

Banks have requested the Finance Ministry to help them in recovering the loan amount. It is, however, noted that the future of the companies whose licences have been cancelled is still not clear. Few companies are having disputes over their stakes in the venture. Some of them are mulling their exit from India. Few are gearing up to grab the licence again whereas some companies are demanding compensations. Amidst all this, banks are in doldrums and decisions on recovery of loans are yet to come.

Banks’ problem is that the criteria on which the loans were disbursed are not relevant anymore. Bigger part of the loan was given for installation of tower, capital and operating expenses and expansion of 2G services.

These companies were doing loan repayment well on time till January 2012. But after the Supreme Court’s rulings repayments are hampered. Banks want that the situation on repayment gets clear by April 31, 2011.  Else the stuck loan amount will be considered as Non Performing Assets (NPA) and will affect the profits of Bank. In the recent reports released by Moodys and Fitch it was mentioned that with the cancellations of 2G licences banks’ profits can be affected by 10 percent.

According to sources, PSU banks have given loan of Rs 19,135 crore to the companies which got 2G licence allocations. Private banks have given a loan of Rs 8,803 crore. PSU banks have given a loan of Rs 6664.2 crore to Idea Cellular, Rs 4,146.42 crore to Tata Teleservices and Rs 3,220 crore to Videocon Telecommunications.