SBI seeks review of SC verdict that 'spectrum' does not count as an asset in IBC proceedings
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Why in news
State Bank of India (SBI) appealed the Supreme Court's February 13 ruling that 'spectrum' cannot be treated as an asset in Insolvency and Bankruptcy Code (IBC) proceedings.
Background
The Supreme Court ruled that spectrum is a scarce natural resource owned by the Indian government, not an asset owned by telecom service providers (TSPs). SBI argues this ruling affects bank financing and risk assessment for lenders in insolvency cases.
Facts for Prelims
- FactSupreme Court ruling date: February 13
- BodySBI: State Bank of India
- FactSpectrum: Defined as a finite public resource owned by the Indian government
For Mains
Q. Discuss the implications of treating spectrum as a public resource rather than a private asset on the insolvency framework of telecom companies in India.
Dimensions to cover in your answer
- Lender risk: Difficulty in collateralizing spectrum for securing bank loans during insolvency
- Regulatory friction: Conflict between government ownership of public resources and private commercial rights
- Valuation gap: Challenges in assessing the economic value of non-transferable licenses in bankruptcy
Keywords: Insolvency and Bankruptcy Code · Public Resource · Collateralization · Risk Assessment · Spectrum Licensing
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