PSU Banks may not help Satyam

Public sector banks are unlikely to offer fresh line of credit to embattled Satyam Computers even as its government appointed board member Deepak Parekh said banks ought to be open to lend to the IT firm, report Mahua Venkatesh.

Public sector banks are unlikely to offer fresh line of credit to embattled Satyam Computers even as its government appointed board member Deepak Parekh said banks ought to be open to lend to the IT firm.

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Sources who did not wish to be identified said until the financial position of the firm is clear, state-owned banks would not extend credit to Satyam.

Incidentally, it is understood that Satyam has not yet approached public sector banks for credit. Sources feel the disgraced IT firm should approach its existing bankers to provide credit on an immediate basis.

The IT firm is yet to put in place its full board, nor the chief executive officer and chief financial official. “Until these things are sorted out and there is some semblance of order, state-owned banks would not be keen on lending to Satyam,” the official of a public sector bank said.

While state-owned bank have no exposure to Satyam, they have extended about Rs 3,400 crore to its subsidiaries including Maytas. “We are keeping a close watch on the developments and we will take a call accordingly,” the source said, adding there has been no recall of loans until now.

However, banks have indicated that in case these projects are scrapped, there could be an increase in the non performing asset level.