"Telecom is a market with huge potential. How can a bank not lend to the telecom sector. Of course they will be encouraged to lend," he told reporters after meeting heads of public sector banks and financial institutions.
The sector has been facing pressure in the margins amid significant borrowing costs as firms acquired huge debts for buying spectrum for 3G and wireless broadband segment services.
Further, banks have become cautious in lending to the telecom firms, especially after Supreme Court cancelled 122 licences of 9 firms in connection with 2G scam.
"Our slowdown is a temporary slowdown, it will pick up and once the turnaround comes, these (stressed) sectors will pick up, so banks must lend to all these sectors," he said adding banks cannot say no to lending because there is a slowdown.