State Bank of India chairman Arundhati Bhattacharya, on Tuesday, said the recent Reserve Bank of India (RBI) circular on increased provisioning for cases sent to the bankruptcy courts will impact SBI but the bank will be able to manage it “without much difficulty”. Bhattacharya was speaking to shareholders at the bank’s annual general meeting (AGM) in Mumbai. She said the bank is doing everything possible to resolve the bad loan issue.
The RBI has asked banks to take 12 accounts into the bankruptcy court in line with the NPA ordinance. “These (12 accounts) have been NPA for quite some time and as a result of that we have substantial provisions already for these accounts. Yes the new circular on increased provisions will impact the bank and it is something which is quite reasonable and is something we will be able to manage without having too much of difficulty,” Bhattacharya said.
The central bank directed the banks to provide at least 50 per cent of the loan in cases being sent to the national company law tribunal (NCLT) and provide 100 per cent in cases that failed to be resolved within the deadline of the court and are subsequently sent for liquidation. Bhattacharya said the bank has been making provisions as ‘prudentially’ as possible. “Many a times we are making a little more than what the regulatory demand is because we know that more of these provisions will be required,” she said.
She said at least three accounts that were supposed to be referred to the NCLT within 15 days have been done. “In respect of the other three accounts for which we have time till, I think up to 15 of the month, we will take them by that time, maybe a little earlier as well,” she said. According to Bhattacharya, over and above the 12 cases mandated by RBI, there are another four cases which have been sent to NCLT .
“There would be another few where others have gone to the courts and we are responding to it. Overall, I think there are around 20 cases in the insolvency courts,” she told shareholders. On Jio Payments Bank, Bhattacharya said that the bank is awaiting some RBI clarifications and will take another quarter to start operations. On recovery of cases referred to the central bureau of investigation (CBI), she said the number of such cases are very low. “Recovery for banks, they (CBI) feel, should be done by the debt recovery tribunals (DRTs) and the resolution courts,” she said.