SBI appoints directors in stressed cos to deal with loan restructuring

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Aparna Iyer, Pranav Nambiar: Mumbai, Jan 24 2013, 01:13 IST

having a nominee director has become greater because of a huge surge in recast cases and since the restructuring package has certain expectations from the company. Bankers are giving more time and sometimes more funding towards the recast package and they expect certain quid-pro-quo from the company and management, he added.

The CDR cell in the first nine months of the financial year restructured accounts to the tune of R63,000 crore. This is about 31% higher than the R48,000 crore worth of accounts recast in the same period of the previous financial year.

SBI official added that promoters of stressed companies have no problem with having bank representations on the board. “Bankers are stakeholders and it is only fair they have a board position. As to how long they will continue will depend on the company’s performance and need,” the official added.

At the end of the September quarter, the restructured loan book for SBI as a percentage of the overall loan book stood at 4.4% (R40,454 crore). According to the management, the restructured pipeline stands at R5,000 crore for the coming two quarters.

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