Banks came under pressure in trade today because of the stress from Vodafone-Idea (VIL). Nifty bank, nifty PSU and private bank indices closed lower. Total exposure of banks to VIL is nearly $2.7 billion or so.
Ritu Singh reports that if VIL does default, it will not have a large systemic implication for the banking system but individual banks will see higher NPLs. State Bank of India has the highest exposure of about Rs 11,000 crore but as a percentage of networth or as a percentage of total loan book it is IDFC First Bank and Yes Bank, which are going to be the most impacted with exposure of around Rs 3,000-4,000 crore.
Just days ago, CNBC-TV18 had reported about a letter written by Kumar Mangalam Birla to the government expressing willingness to hand over his stake in Vodafone-Idea. Birla had said that the telecom company was on the brink of collapse in his letter written in early June.
Vodafone Global's CEO Nick Read has said that they would not be infusing fresh equity into the JV.
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