The Public Sector Bank Punjab National Bank, has now planned to bring around 250 defaulters to the National Company Law Tribunal (NCLT) with a view to recover the over dues. In line with this, the bank has advised each Circle office to identify at least five defaulters who can be taken to the NCLT. Punjab National Bank has 76 circles PAN India and the bank feels that this method would bring down the delinquency in bad debts considerably.
In delinquency cases, where the primary assets are not available, the bank intends going through the NCLT route and take precedence over others. Banks have the option to go for bilateral or consortium based debt recast approach to the Debt Recovery Tribunal for recoveries of overdues. However, due to Insolvency and Bankruptcy Code 2016, banks are planning to go through the NCLT route, which is a platform for taking a time bound action.
The Bankruptcy code provides time bound solution for insolvency issues related to companies and individuals. These will be completed within 180 days. In case insolvency does not come to the rescue, the borrower’s assets will be sold for adjustment of dues. There is a huge pool of stressed loans of corporates and NCLT platform should provide some solution. The bank has set a target of Rs. 20,000 crore for recovery plus upgrade for the current financial year, which stands at Rs. 14,724 crore now. January 2017 recorded a recovery of Rs. 1300 crore and the bank hopes to increase the recovery in the coming months. Further proposals of PNB are:
- PNB has plans to raise Rs. 1500 crore through Tier I bonds. The timing for issue would depend on market conditions.
- The bank has not gone below the listing price after listing.
- The Bank’s capital adequacy ratio (CAR) stood at 11.62 per cent with Tier I capital at 8.84 per cent at the end of December 2016.
- The bank’s write off portfolio stood at Rs. 2,386 1,619 2,551 and its Gross NPA showed a figure of Rs.56,654 56,466 55,628.