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Saturday 25 January 2020

SBI expects to recover Rs 30,000 crore bad loans via IBC resolution

Besides recoveries from resolution under IBC, the bank expects to get back another Rs 10,000 crore from one-time settlement, he said

Kolkata: State Bank of India (SBI) expects to recover around Rs 30,000 crore from the resolution process under the Insolvency and Bankruptcy Code (IBC) during the current fiscal, an official said on Saturday. From the two stressed assets’ list referred for resolution under IBC by the Reserve Bank of India, the bank’s total exposure was around Rs 78,000 crore, Pallav Mohapatra, DMD (stressed assets resolution group) of SBI said.
The bank had been able to recover Rs. 8,500 crore from the Bhushan Steel-Tata Steel resolution by taking a haircut of 30%. From the Electrosteel-Vedanta deal, the bank expects to recover Rs. 6,000 crore, he told reporters on the sidelines of a Confederation of Indian Industry (CII) event here today.

 

State Bank of India’s total NPA (non performing assets) stood at Rs. 2.20 lakh crore. Besides recoveries from resolution under IBC, the bank expects to recover another Rs. 10,000 crore from one-time settlement, sale to asset reconstruction companies (ARCs) and some from outside NCLT, he said.

SBI had filed 250 cases under IBC with a total exposure of Rs. 95,000 crore. Mohapatra said “whatever stress is there has been recognised. We don’t expect recovery of the full amount”.

“In case of Bhushan Steel, we have got Rs. 8,500 crore with a 30% haircut and our claim was around Rs. 11, 500 crore. For the other case, the money has been deposited to escrow account. Once the court gives the clearance, it will be adjusted,” Mohapatra said.

The bank official says that there will be no dent on profitability of the bank as adequate provisioning had been made for haircuts, which is unavoidable. He further said the proceeds from the Bhushan Steel case, would go in the write-off of provisions and reduction of non-performing assets.

From the Electrosteel-Vedanta deal, the bank expects to recover Rs 6,000 crore, he said. The bank’s total NPA stood at Rs 2.20 lakh crore. Besides recoveries from resolution under IBC, the bank expects to get back another Rs 10,000 crore from a one-time settlement, sale to ARCs and some from outside NCLT, he said.

The bank had filed 250 cases under IBC with a total exposure of Rs 95,000 crore.

Mohapatra said “whatever stress is there has been recognised. We don’t expect a recovery of the full amount”.

He said there will be no dent in the profitability of the bank as adequate provisioning had been made for haircuts which is unavoidable.

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