Public sector lender Allahabad Bank on Thursday said it is planning to sell its non-crore assets, including divestment of its stake in joint ventures and associates, and also some of the immovable properties as a part of the government’s reform agenda for state-run banks. Last month, the Kolkata-based lender had said it was expecting to come out of the Prompt Corrective Action (PCA) framework of the Reserve Bank of India (RBI) by March, 2020, if everything went “well and smooth” as per its projections.
In a stock exchange filing on Thursday, the bank said in compliance with the government’s directive under public sector banks’ reform agenda it has also initiated various steps to leverage its strengths for focusing on its core business. In May, the RBI had imposed additional restrictions on the bank under the PCA framework. The central bank had asked the lender to restrict expansion of risk-weighted assets (RWA), reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits.
Notably, talking to the media after the annual general meeting in last month, the bank’s executive director N K Sahoo said a roadmap to deal with the rising bad loans and revamp its operations had been submitted to the central government. “We are expecting Rs 400-500 crore through asset sales,” Sahoo had said.
The bank is expecting nearly Rs 3,000 crore recovery through NCLT resolutions this fiscal, while around Rs 2,000 crore is expected through normal recovery process. “We have already recovered around Rs 1,300 crore from the resolutions of Bhushan Steel and Electrosteel Steels insolvency cases” the executive director had informed.
“The bank is undertaking several measures to come out of PCA. We are not going for bulk deposits and trying to shrink our balance sheet. We want to make it more healthy. Also, we are focussing on recovery of bad assets,” he had said. Saddled with bad loans of Rs 26,563 crore, the bank’s gross non-performing assets as a percentage of total advances stood at 15.96% in the March quarter of FY18 from 13.09% in same period of FY17.