Bank of Baroda (BoB) is likely to recover up to Rs 2,700 crore from non-performing assets in the current fiscal year, up 80% year-on-year, a senior official at the bank told FE.
The state-owned bank, which recovered a total of Rs 1,492 crore in the previous financial year, has already recovered around R1,750 crore as on February 29, the source said.
“The initial 9 months of the year were a little slow. We could only garner around Rs 900 crore by December. But in the 60 days of January and February we managed to recover another Rs 850 crore,” the source said, adding that around Rs 850 crore was expected to be recovered in March alone.
When seen as a percentage of the opening balance of NPAs for the fiscal year, BoB managed to recover 12.6% of the amount during FY15. If the bank is able to meet the recovery target this year, it will have recovered 16.6% of its opening balance of NPAs, a rise of 400 basis points year-on-year.
“January and February were good months. We recovered almost as much as we did in the nine months before that. Totally, we expect to recover between Rs 2,500-2,700 crore by end of March,” the official said.
Recovering from non-performing accounts is usually a slow and difficult process for public sector banks. One of the avenues for recovery are the debt recovery tribunals (DRT). Bankers say that these tribunals give too much leeway to borrowers by way of adjournments.
Speaking about this after BoB’s December quarter results, managing director and chief executive officer PS Jayakumar had said, “As far as PSBs’ inability to recover or go for one-time settlements (OTS) is concerned, there is, today, a change in mindset and we have introduced new policies that allow us to look at OTS with an open mind.”