Andhra Bank to restructure bad loans of committed promoters

The bank, which has huge exposure to infrastructure and power, has NPA to the tune 6% and restructured loans at 13% of its advances

Andhra Bank is ready to restructure troubled loans of industries where it sees enough commitment from the promoters, according to its chairman and managing director CVR Rajendran.

“What the promoter is bringing to the bank's table is very important for me. A company like GMR Infra is now willing to sell anything in the portfolio today. Even IVRCL Ltd, after seeing NPA troubles, had sold some of its core assets to bring liquidity into the system,” said Rajendran, and added, “As a banker I would prefer to restructure loans and extend fresh working capital requirements in cases like this.”

Speaking at an interaction with members of Federation of Small and Medium Enterprises here on Tuesday, he said he would not support a promoter who comes in Maruti 800 during borrowing, but would drive in a Benz before the BFIR. “I believe every recession brings tremendous growth,” he said.     

Andhra Bank, which has huge exposure to infrastructure and power, has non-performing assets (NPA) to the tune 6 per cent and restructured loans at 13 per cent of its advances. “I have enough troubles as 19 per cent of my assets do not yield anything,” said Rajendran.  

He asked small industries to figure out problems related to bad loans to the respective resolution committees of industry bodies. The bank would then arrive at a meaningful solution at its meeting with the industry resolution committees.

Rajendran said the bank did not see any growth this year. “We opened 90 branches from the planned 220 new branches this year. Of these, around 50 per cent are coming outside Andhra Pradesh,” he said.

On the impact of proposed bifurcation of Andhra Pradesh on the bank, he said, “I don’t believe  it. Either way it would not affect Andhra Pradesh.”

Andhra Bank is expected to come out with its third quarter results on February 7.