PSBs roping in consultants to help revive stressed cos

Mar 28 2014, 16:36 IST
Comments 0
SummaryGrappling with rising non-performing assets (NPAs), public sector banks are engaging consultants to help revive companies in trouble.

Grappling with rising non-performing assets (NPAs), public sector banks are engaging consultants to help revive companies in trouble.

“Close to 80% of all cases we get from banks are by PSBs since they are keen to recover as much as possible,”Nikhil Shah, senior director, Alvarez & Marsal India (A&M), said.

Indeed, consultants appear to have found a new revenue stream in assisting public sector banks to turn around distressed firms. “There is an increased focus on toxic assets by PSBs after the RBI put out guidelines on early detection of stressed assets,” Sankar Krishnan, MD, A&M, said.

Gross NPAs of public sector banks at the end of December 2013 stood at R2.2 lakh crore, an increase of 38.3% over R1.59 lakh crore in March 2013.

Also see: Financial Express: India's Best Banks

The State Bank of India (SBI) reported R67,799 crore of bad loans at the end of the December quarter; it has the largest share of total gross NPAs of 40 listed banks, followed by Punjab National Bank (R16,596 crore).

Also read: Sunny Leone: I had fun, no regrets about working in adult entertainment industry

The turnaround plan involves appointment of an interim CEO, a chief restructuring officer and other executives who work with the existing management. “We assess the liquidity of the company and look into its cash management. Trust deficit occurs when a company defaults or is about to default to a lender,” said Krishnan.

Also read: Complaint against Amitabh Bachchan for promoting superstition in TV commercial

Ads by Google

More from Front Page

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...