Banks Recast Rs 7,300 Crore Assets In 2001-02

Thirty commercial banks, mostly in the public sector, have restructured loan assets of Rs 7,310.09 crore in 2001-2. The list does not include the State Bank of India, which is yet to publish its balance sheet.

Standard assets form a major chunk of the restructured portfolio at Rs 6,408.16 crore, followed by sub-standard assets (Rs 788.42 crore) and doubtful assets (Rs 84.90 crore).

The 30 banks, whose data on restructured assets is available, include 24 public sector banks, four old private sector banks and two new private sector banks. The total quantum might touch Rs 15,000 crore once the figures of SBI and ICICI Bank are available, senior bankers said.

The Reserve Bank of India, which last year allowed banks to restructure assets of companies that have been suffering from the cyclical downturn, has identified three different stages in the restructuring of assets.

It can be done before commencement of commercial production, after commencement of commercial production but before the asset has been classified as sub-standard, and after commencement of commercial production when the asset has been classified as sub-standard.

According to the RBI, rescheduling the instalments of the principal alone in the first two stages would not cause a standard asset to be classified in the sub-standard category provided the loan facility is fully secured.

Rescheduling of interest in the first two stages would not downgrade a standard asset to the sub-standard category, subject to the condition that the amount of sacrifice is either written off or adequate provisions are made to the extent of the sacrifice involved.

Among the public sector banks, Bank of Baroda restructured stressed accounts worth Rs 626.37 crore, followed by Dena Bank (Rs 624.82 crore), Punjab National Bank (Rs 603.8 crore), Canara Bank (Rs 484.29 crore), Oriental Bank of Commerce (Rs 484.1 crore), Bank of India (Rs 449.24 crore) and Allahabad Bank (Rs 424.58 crore).

These 30 banks reported gross non-performing assets (NPAs) for 2001-02 of Rs 39,408.46 crore while the net NPAs were around Rs 20,896 crore. The gross NPAs of the State Bank of India were Rs 15,874.97 crore.