Rajiv Anand, deputy managing director (designate), Axis Bank, said there has been talk by some banks on extending timelines. But Axis does not see the need for such a move. Anand said at a media briefing that the restructured book in Axis Bank’s portfolio is small and that the lender is performing up to expectations.
Its restructuring in wholesale book is Rs 1,521 crore as of September 2021. Banks have made a case for extending the timeline beyond March 2022, both separately and through industry lobby group Indian Banks’ Association (IBA).
The deadline has already been extended once, and if the borrowers are not able to meet the parameters, banks are required to classify the loans as “non-performing.”
Though the economy is in recovery phase, many corporates in contact-intensive sectors, which had opted for restructuring in 2020, continue to face cash flow issues. The contact-intensive sectors include hospitality, aviation and real estate, bank executives said.
Lenders pitching for it are seeking another six months’ extension, claiming restructuring of accounts under the framework is still underway, slower recovery in some sectors and uncertainties caused by the Omicron variant.
On the buzz about a deal with microfinance institution (MFI) Spandana, Anand said there is no conversation happening right now.
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