RBI to resolve bad loans of nearly 1,500 accounts with PSBs

As of September 2017, PSBs' gross non-performing assets (GNPA) stood at Rs 7.34 lakh crore.

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As the Reserve Bank of India (RBI) is busy solving 60% of banking system's stressed assets by identifying large loan defaulters, the government data discloses that there are 1,463 entities with bad loans of Rs 100 crore or more in 21 public sector banks (PSBs).

The Finance Ministry has come out with the data stating there are 1,463 entities account for bad loans of Rs 100 crore or more in 21 PSBs, a news agency report said.

The largest lender, State Bank of India (SBI), reportedly topped the chart having 265 accounts alone with bad loans of more than Rs 100 crore each, totalling up to Rs 77,538 crore as of September 2017.

Second on the list is Punjab National Bank (PNB) with 143 accounts holding bad loans of Rs 100 crore each – aggregating up to Rs 45,973 crore--followed by Canara Bank.

Other PSBs in the list were – Union Bank of India with 79 accounts, Oriental Bank of Commerce with 68 such accounts and UCO Bank with 62 accounts.

As of September 2017, PSBs' gross non-performing assets (GNPA) stood at Rs 7.34 lakh crore. RBI has taken stringent action against cleaning up stressed assets from banks balance sheet especially the PSBs.

Among the latest measure RBI has taken to resolve NPA issue is by referring loan defaulters, owing Rs 100 crore or more to banks, under Insolvency & Bankruptcy code (IBC).

It may be noted that RBI with its Internal Advisory Committee (IAC) started the move to recognise accounts for IBC in June last year.

The IAC will reportedly focus on top-500 exposures in the banking system which are classified partly or wholly as non-performing assets (NPAs).

RBI has also expanded the overseeing committee (OC) panel by appointing more members who will look after the NPA resolution under Scheme for Sustainable Structuring of Stressed Assets (S4A).

The committee will review the cases being restructured under the S4A resolution where the aggregate exposure of the banking sector to the borrowing entity is greater than Rs 500 crore.

While announcing the IBC measures, RBI had stated that specific directions will be issued by RBI to banks for identifying individual cases for filing under IBC. These cases will be accorded priority by the National Company Law Tribunal (NCLT).

Banks, however, have three options namely Lok Adalats, Debt Recovery Tribunal and SARFAESI Act for the recovery of NPAs.

According to the recent RBI data, there are 21,52,895 cases having NPA value of Rs 105,800 crore; of this Lok Adalats managed to recover merely Rs 3,800 crore in FY17, SARFAESI Act recovered Rs 7,800 crore from 80,076 accounts having NPA value at Rs 113,100 crore.

At Debt Recovery Tribunal, where 28,902 accounts having NPA value at Rs 67,100 crore are under consideration, only Rs 16,400 crore could be recovered.