press trust of india
New Delhi, Jan 1: With the closure of RBI’s deadline to resolve the 28 identified large stressed accounts in the second list, banks are gearing up to refer as many as 24 of them for insolvency proceedings.
In August, the Reserve Bank had asked banks to either resolve the 28 more large stressed accounts or refer them to the National Company Law Tribunal (NCLT) by December 31. These accounts together account for 40 per cent of bad loans of around Rs4 lakh crore.
“Except for Anrak Aluminium, Jayaswal Neco Industries, Soma Enterprises and Jaiprakash Associates, all other accounts are going to the NCLT (for resolution),” a senior banker said.
Some of the large accounts, which are likely to go to the NCLT, include Asian Color Coated Ispat, Castex Technologies, Coastal Projects, East Coast Energy, IVRCL, Orchid Pharma, SEL Manufacturing, Uttam Galva Metallic, Uttam Galva Steel, Visa Steel, Essar Projects, Jai Balaji Industries, Monnet Power, Nagarjuna Oil Refinery, Ruchi Soya Industries and Wind World India.
In the case of Anrak Aluminium, the lenders are looking for a one-time settlement, while for Soma Enterprises, the banker said the account is closer to resolution. For Jaiprakash Associates — its EPC business arm — the lenders are seeking Reserve Bank approval for a “deep restructuring”, another banker said.
The lenders have also sought RBI permission to extend the December 13 deadline for Videocon Industries, where they have huge exposure, said another banker.
However, RBI refused to extend the deadline and banks are preparing to approach NCLT.
Banks will also have to make a provision of 50 per cent on these accounts by March 2018.
It can be noted that of the 12 largest accounts that the RBI had named on the June list, 11 of them are under the NCLT.
The apex bank’s internal advisory committee identified 12 large stressed cases worth over Rs5,000 crore, accounting to 25 per cent (Rs1.75 lakh crore) of total gross non-performing assets, for proceedings under the insolvency and bankruptcy code.
The central bank advised banks to set aside 50 per cent provisioning against secured exposure and 100 per cent against unsecured exposure in all cases referred for bankruptcy.
24 pc GNPA of PSBs from iron, steel cos
New Delhi: Iron and steel sector accounts for about 24 per cent of total gross non-performing assets (GNPA) in basic metal and metal product category for public sector banks (PSBs), according to the Ministry of Steel. “The share of gross non-performing assets (GNPA) for iron and steel in basic metal and metal product category as on September 30, 2017 is 23.70 per cent for public sector banks,” the Minsitry of Steel said in a statement. As per the National Steel Policy, 2017, the Indian steel industry contributes approximately 2 per cent to the country’s Gross Domestic Product (GDP). The benefit of RBI schemes namely 5/25 Scheme and Scheme for Sustainable Structuring of Stressed Assets (S4A) for restructuring of debts of stressed companies can be availed by steel companies. Public sector banks have been reeling under high non- performing assets (NPAs). Their NPAs have increased more than two-and-a-half times to Rs7.33 lakh crore as of June 2017, from Rs2.75 lakh crore in March 2015. The RBI’s internal advisory committee had identified 12 large stressed cases worth over Rs5,000 crore, accounting to 25 per cent (Rs1.75 lakh crore) of total gross non-performing assets, for proceedings under the insolvency and bankruptcy code. The RBI in its second list of big defaulters released in August had asked banks to resolve 28 large accounts till December 13 or report them by December 31 to NCLT for insolvency proceedings.
