SBI will sell NPAs of Bombay Rayon Fashion and Shivam Dhatu worth ₹2,490 cr and have invited bids for the same. Bombay Rayon Fashion owes the bank ₹2,260 cr while Shivam Dhatu owes ₹229.32 cr. The dues of Bombay Rayon Fashion excludes equity investment.
According to SBI‘s revised policy on sale of financial assets in line with the regulatory guidelines ‘we place these accounts for sale to ARCs/banks/ NBFCs/FIs’, the bid documents read.
Financial institutions that hold more stakes in Bombay Rayon Fashion include SBI (29.28%), Axis Bank (8.04%). Other banks like Union Bank of India, Exim Bank of India, PNB, Central Bank of India and Allahabad Bank hold 1.61-3.35 % stakes and as per BSE data, the rest is held by public shareholders.
‘The interested ARCs/banks/NBFCs/FIs can conduct due diligence of these assets with immediate effect, after submitting an expression of interest and executing a non-disclosure agreement (NDA) with the bank, SBI said. e-bids would be processed on August 20.
In an interview, last month to the mint SBI chairman Rajnish Kumar expressed recoveries at around 50% from the RBI’s identified initial 12 large bad loan accounts. ‘The recoveries will be around 50% and most banks are holding provisions in excess of 50%. It may differ from bank to bank, but at SBI, our estimate is that we will be able to write back part of the provisions if everything goes well, Kumar said.
SBI plans on a 10% credit growth for FY19 and is eyeing on an asset mix of 60% retail and 40% corporate. Speaking on investments Kumar said, ‘I don’t have (a) pipeline of investments in (the) private sector. But there is huge investment happening in the roads sector’.
Gross NPA increased to 10.69% of the total advances as of June 2018. It was at 9.97% a year back. An increase from ₹ 188,068 cr to ₹ 212,840 cr. SBI reported a loss of ₹ 4,876 cr from NPAs and bad loans.