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Bank of India (BoI) received covid-19 debt recast requests from 50,000 borrowers for loans totalling 6,100 crore, chief executive A.K. Das said, lower than what the state-run bank had initially expected.

“When we identified eligible accounts, there were about 300,000 eligible ones involving 23,000 crore. Moreover, of the 6,100 crore, we have already implemented 1,200 crore of restructuring," Das told reporters on Wednesday.

After a six-month moratorium on loan repayments, the Reserve Bank of India (RBI) allowed banks to restructure loans of stressed borrowers without classifying them as bad loans, thus saving them from excess provisions.

Mint had reported on 8 February that banks have so far agreed to recast 1 trillion in stressed loans, slightly higher than 1% of their aggregate loan portfolios.

Analysts had estimated it to be in the range of 2.5-4.5% of all loans.

The bank on Wednesday reported an over five-fold rise in net profit to 541 crore in the December quarter as provisions fell. Its total provisions and contingencies declined 50.68% from a year ago to 1,980 crore in the December quarter. The bank’s net interest income (NII), the difference between interest earned and expended, shrank 9.19% to 3,740 crore. Its domestic net interest margin (NIM), a measure of profitability, was at 2.81% as on 31 December 2020.

“We passed on about 60 basis points (bps) as policy rate transmission and in repo-linked loans (it was) about 40 bps. In contrast, we passed on only 38 bps in our weighted deposits. As deposit repricing takes a little longer to show the effect, there was an impact on our NII," said Das.

The bank’s gross non-performing assets (NPAs) as a percentage of its gross advances stood at 13.25% as on 31 December 2020 as against 16.3% in the same period last year. However, had it not been for the 3 September Supreme Court order on asset classification, the bank’s gross bad loan ratio would have touched 14.59%.

“Going forward, in the worst-case scenario, this gross NPA of 13.25% could at the most go up to 14.25%. We are aiming at a recovery of 2,500 crore in this quarter, of which 575 crore has been done," said Das.

Unlike some of his peers, the bank does not see rising delinquency in the retail loan portfolio. Das said that retail delinquencies are about 2.3%, which is very low compared to overall delinquency.

“We don’t see much challenge in the retail space. In secured loans, as they call it, there will always be less delinquency compared to other segments and recovery leeway is also much better there. We don’t foresee a very serious challenge in the retail loan segment as far as asset quality is concerned," he said.

The lender’s loan book stood at 4.14 trillion in the December quarter, 9.59% higher on a y-o-y basis. Its total deposits were at 6.11 trillion, 17.19% higher from the same period last year.

“In the beginning of the financial year, we had said that going by the pandemic and the uncertainties, we would like to be little conservative as we were aware that there would be a lot of roadblocks in the ecosystem and we had given a (credit growth) guidance of 7.5%," said Das, adding that the bank would now revise its FY21 credit growth estimate to 8-8.5% and 10-12% in FY22.

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