Nifty99000 100%

Sensex99000 100%

Article rating: 4.2
Article rating: 5.0
Article rating: 5.0
Article rating: 4.8
Article rating: No rating
Article rating: 5.0
Article rating: 3.7
Article rating: 2.0
Article rating: 3.6
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: 5.0
Article rating: No rating


AllBank set to recover Rs 5,500 crore in FY19

Author: IANS/Wednesday, June 27, 2018/Categories: Banking & Financial Services

AllBank set to recover Rs 5,500 crore in FY19

Kolkata, June 27 - State-run lender Allahabad Bank is looking at a recovery of around Rs 5,500 crore in the current fiscal, an official said on Wednesday.

The bank has submitted a roadmap to the Centre and if everything goes "well and smooth" as per its projections, it was likely to come out of prompt corrective action (PCA), imposed by the Reserve Bank of India (RBI), by March 2020, the official said.

"We are expecting Rs 3,000 crore recovery through resolution in NCLT (National Company Law Tribunal) in the entire financial year, another Rs 2,000 crore through normal recovery process and Rs 400-500 crore through asset sales," Allahabad Bank Executive Director N.K. Sahoo said. 

"We have recently recovered around Rs 1,300 crore from the resolution of Bhusan Steel and Electrosteel Steels," he added.

The bank has an outstanding exposure of Rs 4,000 crore in several accounts referred to NCLT including Uttam Galva, Alok Industries, Essar Steel, he said, adding that it was hopeful of recovering from these accounts in the current fiscal. 

The bank may have to take a hair-cut upto 50-60% in these accounts, he added.

"We have created a NCLT cell to effectively monitor the NCLT accounts. We have almost 94 (stressed) accounts referred by us as well as by other lenders amounting around Rs 12,000 crore. 

"Almost 45% of our gross NPA is in the NCLT," Sahoo told shareholders here at the 16th Annual General Meeting of the Allahabad Bank.

Capital requirement for the lender during the current fiscal would be close to Rs 9,000 crore, Sahoo said on the sidelines of the meeting.

"The bank would require close to Rs 9,000 crore worth capital this fiscal," he said.

Of the total capital requirement, the bank requested the government to pump in Rs 7,000 crore and was looking to raise close to Rs 1,900 crore through different modes this fiscal. 

This apart, it is hopeful of raising close to Rs 500 crore from sale of non-core assets.

"A roadmap has been submitted to the (Finance) Ministry. If everything goes well as per the bank's projection, we are expecting to come out of PCA by March 2020," he said.

At the end of the 2017-18, gross NPA (non performing assets) of the bank stood at Rs 26,562.76 crore as compared to Rs 20,687.83 crore in FY 17 (2016-17) and Net NPA remained at Rs 12,229.13 crore as on March 31, 2018 as against Rs 13,433.51 crore in FY 17.

Owing to high non-performing assets (NPA) and negative return on assets (RoA) for two consecutive years, the bank was brought under prompt corrective action framework by the RBI on January 2, Sahoo told shareholders. 

In fact, subsequently, the RBI had imposed additional restrictions on Allahabad Bank under prompt corrective action (PCA) framework. 

It was asked to restrict expansion of risk-weighted assets (RWA), reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits. 

The bank had posted a net loss of Rs 3,509.63 crore in the March quarter of 2017-18.

Print Rate this article:
No rating

Number of views (287)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free