State Bank of India will be able to write back Rs 12,161 core, Canara Bank Rs 3,493 crore, Punjab National Bank Rs 2,701 crore and ICICI Bank Rs 2,110 crore due to the payment from ArcelorMittal.
By Ankur Mishra
The creditors of Essar Steel have started receiving their dues from ArcelorMittal, and the entire process of transferring the full amount of Rs 42,000 crore to the lenders will be completed by Monday, sources told FE.
The development follows the Supreme Court’s November 15 order which paved the way for ArcelorMittal to take over Essar Steel for Rs 42,000 crore. Once the transfer of funds is complete, it will result in a complete write-back of provisions for most of the lenders who had provided 100% against the debt-laden steel company. This would mean the entire amount would get reflected as a write-back under the non-interest income head of the concerned banks in Q3FY20.
Essar Steel was among the first list of the largest 12 stressed accounts that the Reserve Bank had drawn up in June 2017 and asked banks to refer to the NCLT and the company was formally sent to the tribunal on June 27, 2017. As per the October 2018 resolution plan, secured financial creditors would recover 92% or around Rs 42,000 crore of their total exposure of Rs 49,046 crore.