Nifty99000 100%

Sensex99000 100%

Article rating: 4.1
Tags:
Article rating: No rating
Tags:
Article rating: No rating
Tags:
Article rating: No rating
Tags:
Article rating: No rating
Tags:
Article rating: No rating
Tags:
Article rating: 4.2
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
Article rating: No rating
Tags:
Article rating: 4.7
Tags:
Article rating: 4.0
Tags:
Article rating: 5.0
Tags:
Article rating: 5.0
Tags:
RSS

News

Bankers see no material impact on their provisioning as RBI deadline ends

Author: PTI/Tuesday, August 28, 2018/Categories: Banking & Financial Services

Bankers see no material impact on their provisioning as RBI deadline ends

Mumbai - As the Reserve Bank deadline to resolve around 70 large accounts worth over Rs 3.8 trillion ended on August 27, and no word coming in from the regulator on an extension, State Bank chairman Rajnish Kumar said the deadline will not have any material impact on provisioning as banks are already in the process of resolving these accounts.

As per the February 12 circular issued by the RBI, banks were to resolve stressed accounts within 180 days beginning from March 1, 2018, failing which banks will have to refer these accounts, which have an exposure of Rs  2,000 crore or above to the NCLTs for bankruptcy process.

The deadline for beginning bankruptcy process ended today and the RBI has so far not come on record saying it will stick to the original direction.

"The August 27 deadline does not have any material impact on the provisioning requirements as most of them have already been classified as bad loans," Kumar told reporters on the sidelines of the annual general meeting of the Indian Banks Association this evening.

Kumar said there would be only ageing provisioning for those accounts which will go to the NCLT.

"There is not going to be any accelerated provisions for these accounts since the February 12 circular doesn't mention it," he said, adding banks will have one year more to spread the provisioning for these accounts.

According to rating agency Icra, 70 large accounts mainly from power, EPC and telecom with a total exposure of Rs 3.8 trillion would require resolution by September 1, as per the February 12 circular.

Kumar said of the 34 stressed power accounts, with a combined value of Rs 1.74 trillion, 16 have already been referred to the NCLT and seven are in the final stages of resolution, Kumar said refusing to name of them.

It can be noted that affected power producers have challenged the RBI direction in the Allahabad High Court, saying their businesses are in trouble due to  external reasons like lack of fuel supplies, and not due to mismanagement, and the matter is still pending with the court.

The RBI attempt at getting the Supreme Court vacate the high court stay did not materialise instead the apex court asked the HC to hear the matter regularly.

"These distressed power accounts are being finalised now with individual banks approving it and even if some of them go to NCLT, we'll be able to withdraw it by 90% majority," Kumar added.

Union Bank managing director and chief executive Rajkiran Rai said as to how many accounts will go the NCLT will be discussed later as banks have 15 days more time to decide on referring them to NCLT.

Print Rate this article:
No rating

Number of views (321)/Comments (0)

rajyashree guha

PTI

Other posts by PTI
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

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
 
 

Categories

Disclaimer

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