New Delhi: The acquisition of debt-laden Bhushan Steel, under the Insolvency and Bankruptcy Code (IBC) framework, will reduce bad loans of PSBs by Rs 35,000 crore, Financial Services Secretary Rajiv Kumar today said.
"IBC transforming credit culture in NewIndia. About Rs 35,000 crore reduction of NPAs of PSBs in Bhushan Steel case. Reduction of NPAs in individual PSBs range from about Rs 500 crore to over Rs 10,000 crore, he tweeted.
Last week, Tata Steel, through its subsidiary, completed the acquisition of controlling stake of 72.65 per cent in Bhushan Steel for around Rs 36,400 crore after emerging as the winning bidder in an insolvency auction.
Kumar said following the Bhusan Steel buyout, public sector banks (PSBs) will write back Rs 7,500 crore of loans which were earlier classified as NPAs.
"Future upside through over 6 crore equity shares acquired by PSBs. Decisive shift towards clean credit culture," Kumar tweeted.
Last week, Finance Minister Piyush Goyal had tweeted that the acquisition was a "historic breakthrough in resolving legacy issues of banks".
Bhushan Steel was among the 12 stressed assets the Reserve Bank of India had referred to the National Company Law Tribunal (NCLT) proceedings last year.