PNB puts 9 large stressed accounts under insolvency and bankruptcy resolution
New Delhi: State-owned Punjab National Bank (PNB) has put nine of its large stressed accounts for resolution under Insolvency and Bankruptcy Code 2016 (IBC). The stressed assets, including restructured and gross non-performing assets (GNPAs), declined to Rs68,772 crore as on 30 June, 2017 from Rs75,564 crore as on June-end in 2016.
“For resolution of large ticket advances, 9 large stressed accounts are under IBC Resolution,” PNB said in an investor presentation. The lender said there is a trend of declining stress on its balance sheet. The standard restructured advances of PNB at the end of the first quarter this fiscal stood at Rs11,051 crore, which was at a high of Rs18,909 crore by 30 June, 2016.
Sector wise, the highest amount of restructuring was done for infrastructure at Rs5,226 crore (47.29%) in June quarter, followed by power at Rs2,912 crore (26.35%), road and port Rs2,068 crore (18.71%), agriculture Rs1,457 crore (13.18%), sugar Rs1,335 crore (12.08%), iron and steel Rs1,331 crore (12.04%) and telecom Rs246 crore (2.23%). Among others, construction, cement, textiles, hotel, services, IT park are the sectors where restructuring has been done in the range of 1.13-2.99%.
The Reserve Bank of India (RBI) earlier in June had asked banks to finalise a resolution plan within six month to resolve bad loans. “In cases where a viable resolution plan is not agreed upon within six months, banks should be required to file for insolvency proceedings under the IBC,” the RBI had said. PNB said there were fresh slippages on its sheet of Rs6,018 crore during the first quarter of 2017-18, of which Rs765 crore were from restructured accounts.
The fresh slippages are down from year ago’s Rs7,533 crore (Rs1,524 crore from restructured accounts). To improve its asset quality, the bank said it has widened the scope of the war room it has created.
PNB has split the existing war room to create separate war room for monitoring of irregular and weak loan accounts. Besides, the bank has been launching a special one time settlement schemes for doubtful and loss category small and medium size NPAs.