New Delhi, Nov. 12 -- India's largest lender is on a collision course with its owner, the central government.

The State Bank of India (SBI) told the Supreme Court on Wednesday that telecom spectrum should be treated as part of the insolvency process and sold to recover dues, setting up a direct clash with the government over the treatment of this key asset when a telecom operator undergoes bankruptcy proceedings.

Arguing in the Aircel spectrum ownership case, SBI said that spectrum is an intangible asset that can be monetized for creditors' recovery, while the government maintained it belongs to the state and held in trust for the public, not subject to the Insolvency and Bankruptcy Code (IBC).

The SBI backed its arguments on the groun...