PSBs claim from borrowers of Rs 1 cr and more at Rs 68k cr

PSBs claim from borrowers of Rs 1 cr and more at Rs 68k cr New Delhi: Public sector banks had not recovered loans worth over Rs 68,000 crore, as of March 2012, from over 7,000 individuals or companies that were given Rs 1 crore or more, according to official sources.

They said 7,295 individual borrowers or companies, who took loans of Rs 1 crore and above, had an outstanding of Rs 68,262 crore from about 27 public sector banks as of March, 2012.

Of this, the highest aggregate outstanding amount of Rs 23,320 crore by 2,419 borrowers is due to the country's largest public sector lender State Bank of India (SBI).

Punjab National Bank needed to recover Rs 5,295 crore (709 borrowers), Central Bank of India - Rs 4,349 crore (222 borrowers), Bank of India - Rs 4,268 crore (507 borrowers) and IDBI Bank - Rs 3,682 crore (579 borrowers), sources said.

As of March 2011, these banks had Rs 34,633 crore as outstanding from 4,589 such borrowers.
As of March 2010, the outstanding on these banks stood at Rs 26,629 crore, from 4,099 borrowers.

"The government has advised PSBs to take a number of new initiatives to increase the pace of recovery and manage NPAs (Non-Performing Assets), which include appointment of nodal officers for recovery, conducting special drives for recovery of loss assets, to put in place warning system," sources said.

Moreover, Parliament has recently enacted 'The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 for removing of certain bottlenecks in the recovery of bad loans.
The Amendment Act has come into force from January 15, 2013.

Besides, sources said, in order to improve the health of the financial sector, reduce Non-Performing Assets and prevent slippages, the Reserve Bank has issued instructions stipulating that each bank should have a robust mechanism for early detection of distress sings, including prompt restructuring in the case of all viable accounts.

"...A loan recovery policy which sets down the manner of recovery of dues, targeted level of reduction, norms for permitted waiver, factors to be taken into account before considering waivers, decision levels, and reporting to higher authorities are amongst the other measures," sources said.

The existing guidelines are sufficient to address the issues of NPAs management, they added.