Banks may reach out to govt on converting Vi dues into equity

Some public sector banks are planning to seek assurance from the government that it would convert part of its dues lying with Vodafone Idea (VI) into equity, according to three senior executives of banks who spoke to Business Standard on condition of anonymity. Their banks have been approached by the cash-strapped telecom company for fresh loans.

- HARSH KUMAR

“Banks are still hesitant to provide funding to VI, but the company keeps approaching us. To move forward, banks are planning to meet with the government to request a commitment to convert its dues into equity in VI,” one of the sources said.

The telecom giant is seeking to borrow approximately ₹35,000 crore, but most banks are wary of extending credit, particularly as VI has struggled to raise funds from other sources. The bank executive pointed out that VI’s outstanding dues to the government remain a significant hurdle: “If the government can provide clarity on this, we may consider lending.” An e-mail request to the telecom provider for comment remained unanswered until the time of publication.