Bank of India sells exposures to three large accounts

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Published: January 8, 2019 2:27:34 AM

Bank of India (BoI) sold its exposures to three large accounts — Alok Industries, Asian Colour Coated Ispat and ISMT — during the quarter ended December with haircuts ranging between 64% and 84%.

Bank of India sells exposures to three large accounts (PTI)

Bank of India (BoI) sold its exposures to three large accounts — Alok Industries, Asian Colour Coated Ispat and ISMT — during the quarter ended December with haircuts ranging between 64% and 84%.

The bank recovered Rs 96 crore from the sale of its Rs 621-crore exposure to Alok Industries, which was one of the 12 large non-performing assets (NPAs) named by the Reserve Bank of India (RBI) in its first list and mandated for resolution under the Insolvency and Bankruptcy Code (IBC). The sale implies an 84.5% haircut for BoI.

Asian Colour Coated was among the 28 accounts named in the central bank’s second list. The sale of this exposure resulted in a relatively better recovery figure of Rs 69 crore for an exposure of Rs 191 crore, or a haircut of close to 64%. As for ISMT, the recovery was to the tune of Rs 155 crore against an outstanding of Rs 422 crore — a 63% haircut.

Banks have taken to selling off their exposures to some accounts undergoing the insolvency process as the 270-day deadline has been breached in cases involving most of the large accounts.

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BoI had in October put on sale NPAs worth Rs 10,710 crore, including its exposures to eight power projects and five accounts named in either of the RBI’s two lists. Later during the quarter, it had invited bids for 44 NPA accounts worth a total Rs 4,703 crore. The accounts include Dighi Port (Rs 273 crore), Lavasa Corporation (Rs 328 crore), Sona Alloys (Rs 23.45 crore) and Visa Steel (Rs 67 crore). Visa Steel, too, is a second-list account. Some accounts, such as Lavasa, Visa Steel and Jyoti Power, have been put on sale more than once by by the bank.

BoI’s recoveries from sale of bad assets during the September quarter did not match its expectations. Dinabandhu Mohapatra, managing director and chief executive officer, BoI, said, “We have recovered around Rs 282 crore during this quarter and that process will continue through Q3 and Q4 also. We have identified accounts worth Rs 10,000 crore for sale, from which we are expecting good recoveries.”

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