Oriental Bank of Commerce to sale NPAs worth Rs 1,000 cr

In all 59 accounts of small, medium size and some large companies are up for sale

Delhi-based public sector lender Oriental Bank of Commerce has put the block bad loans with principal dues of just over Rs 1,000 crore as a step to spruce its balance sheet.

In all, 59 accounts of small, medium and some large companies are up for sale. The bank expects to complete the process of signing the agreement by September , according to the offer document on  in its website.A top official with Asset Reconstruction Company said many banks had floated intent for selling bad loans. Seriousness of intent is critical, as most deals hit the hurdle on the issue of pricing.

Most public sector banks have seen burden of non-performing assets (NPAs) grow due to the slowdown, high interest rates and a stretched payment cycle.

While gross NPAs of OBC rose in absolute terms to Rs 4,183 crore at the end of March 2013 from Rs 3,580 crore at the end of March 2012, its provision coverage ratio improved to 63 per  cent in 2013 from 61.5 per cent in FY12.

Besides selling bad loans, banks have stepped up efforts to recover dues.

The Bank has made concerted efforts for recovery of NPAs and made Cash Recovery of  Rs1,525.77 crore during the Financial Year 2012-13.

Out of Cash Recovery, a sum of Rs 771.83 Crore was added as recovery towards the revenues of the Bank. Further, all the available recovery mechanisms like holding of Recovery Camps and floating of “Special

One Time Settlement Schemes for NPAs for outstanding up to Rs 10 lakh have been used to Bank is also participating in Lok Adalats, taking action under SARFAESI Act-2002, initiating legal action in the competent  Courts and settling of cases under general settlement  policy of the Bank, OBC said.