The stress assets stabilisation fund (SASF) set up by the IDBI Bank in 2004 before it got converted into bank to quarantine bad assets of erstwhile Industrial Development Bank of India (IDBI) has been able to reduce its bad assets substantially.
At the outset the SASF had Rs 9,000 crore of assets.
B Ravindranath, executive trustee of SASF said, ?Out of 631 cases that were transferred to the fund valued at Rs 9,000 crore, we have already resolved 476 cases worth Rs 5,230 crore until now.??
?It includes a sum of Rs 475 crore which were resolved during the 2008-09. The remaining cases are under the process of settlement by the fund which acts on the cash-neutral mechanism,? he added .
The settlement is done by the fund in forms like one-time settlement, sale of assets or restructuring of those companies that are no more viable commercially.
?As of now, we have transferred Rs 4,084 crore to the IDBI Bank which can be used by it for banking operations including lending,? said Ravindranath.
A very negligible amount has been transferred to assets reconstruction companies like Arcil for a simple reason that Arcil provides us security receipts whereas fund is interested in cash payments, said Ravindranath.