Bank of India would be able to recover Rs 1,993 crore after NCLT approved Tata Steel’s bid to acquire Bhushan Steel, the first company to emerge successfully from insolvency, a senior official of the government-owned bank said.
“This amount is not inclusive of the haircuts, but it will bring down the NPA of the bank considerably, boosting its profitability,” BoI managing director and chief executive officer D Mohapatra said in a press conference, here today.
Mr Mohapatra said that BOI had exposure to the tune of Rs 8,300 crore in the first list of 12 large corporate defaulters for initiation of insolvency proceedings sent by RBI to NCLT last year under Insolvency and Bankruptcy Code(IBC). In the second list of 28 defaulters, the bank had an exposure of Rs 3,000 crore, he further added.
The National Company Law Tribunal(NCLT) is the adjudicating authority of IBC. The senior official said, BOI realised Rs 9,000 crore in March last, by way of Standby Letter of Credit (SLOC) and said approximately Rs 500 crore was remaining to be recovered.
Mr Mohapatra said the bank may grow at a rate of 8-10 per cent if the recoveries were made on time and the GDP grew at the project rate of over seven per cent. He also said that the profit may show double-digit progress in the second quarter if the conditions remained favourable.
He also informed that the lending to retail, agriculture and the MSME has gone up from 48 per cent to over 50 per cent of the bank’s total lending.
However, BOI which has 5,200 branches and 6,000 ATMs was going through rationalization and the number of ATMs may be reduced after considering the profitability aspect. Similarly, he said, those branches which were not performing were being worked upon for improvement, failing which they would be relocated. He, however, said that 70 per cent of such branches have shown improvement.