INSUBCONTINENT EXCLUSIVE:
HYDERABAD/MUMBAI: Banks will have to initiate bankruptcy proceedings against dozens of corporate defaulters next week as the six-month
deadline set by the RBI on February 12 ends on Monday
The action will be required where the lenders have been unsuccessful in achieving resolution
The total value of loans in these 60-odd accounts, which are already classified as non-performing assets (NPAs), is expected to be around
Rs 3.5 lakh crore.
But even as the 180-day deadline looms, SBI is racing against time to resolve 11 default cases with loans worth Rs 62,000
crore that are part of the 60 accounts
“Of these, four have been referred to the National Company Law Tribunal (NCLT)
For the remaining, it (process) is at various stages of approval with various lenders and we are trying to complete it next week
If it is not completed, the only option left will be referring it to the NCLT,” said SBI chairman Rajnish Kumar
He was speaking to reporters during a visit to Hyderabad.
A circular issued by the RBI on February 12 has had a twofold impact on banks
The first-round effects of the new regulation were seen in bank results for the quarter ended March 2018
Since the RBI had scrapped all loan-restructuring schemes, total slippages during the fourth quarter shot up to Rs 2.42 lakh crore
As a result, the stock of NPAs rose by Rs 1.2 lakh crore to Rs 10.4 lakh crore despite write-offs and recoveries.
The RBI circular also said
that in the case of large NPAs, worth over Rs 2,000 crore, banks must aim for a resolution within six months
If no resolution was possible, lenders will need to initiate bankruptcy proceedings against these companies in the NCLT
An analysis of bank NPAs by rating agency ICRA showed that 70 large accounts amounting to Rs 3.8 lakh crore of bank exposure would require
resolution by September 1, 2018
This is in addition to the 40 defaulting borrowers with loans of over Rs 4 lakh crore, which have been taken to the insolvency courts
earlier this year following two lists of defaulters handed over to banks by the RBI
Lenders estimate that cases worth around Rs 3.5 lakh crore will remain unresolved
Besides this, the RBI circular issued earlier this year has directed lenders to chalk out a resolution plan for 34 stressed power plants
worth Rs 2.5 lakh crore with a combined capacity of 39GW within 180 days from March 1.
Elaborating on the seven cases, the SBI chief said
there are buyers for these assets
"The price discovery has happened through a transparent mechanism… technical evaluations are complete
So what remains is the documentation part and sanctions by all the lenders
Their board meetings are on different days and, in the next one week, the documentation will be done
In most of the cases, there is a buyer and these assets will be sold… The benchmark that has emerged is Rs 3 crore per MW," he added
On lending activity, he said the corporate sector — which was stagnant — is expected to pick up this fiscal
"Lending is mostly on consumer loans like car loans, home loans, personal loans
SME is showing a good pickup
Corporate loans (are improving) also because now we have put our house in orderso we are looking at some good lending opportunities and I
think this year the corporate lending will be revived
We see 10 per cent growth in advances," he added
In the corporate sector, Kumar said cement, road, steel, auto and oil gas sectors are showing growth
The bank is also recruiting around 8,000 clerical staff and 2,000 probationers this year
He pointed out that the total headcount of the bank is expected to be around 2.60 lakh by the end of this fiscal.
During the visit, he
participated in various CSR initiatives of the bank
He announced a donation of Rs 50 lakh to Greater Hyderabad Municipal Corporation towards Swacch Bharat Mission, Rs 15 lakh to district
hospital at King Koti for construction of public toilets and Rs 20 lakh to Friends of Tribal Society to support the education of
He also handed over loans worth Rs 17 crore under the Mudra scheme of the government.
