Will refer NPAs worth Rs 3,600 crore to the newly constituted Bad Bank: Canara Bank

Canara Bank’s A Manimekhalai said that the bank has recovered almost Rs 2,300 crore from about 81 accounts in the 9 months of the current financial year from NCLT

In an interview to DH’s Veena Mani & Reshab Shaw, Canara Bank’s Executive Director, A Manimekhalai said that the bank has recovered almost Rs 2,300 crore from about 81 accounts in the 9 months of the current financial year from NCLT. Manimekhalai also shared the bank’s plans to win new customers. Excerpts from the interview:

Housing sector has seen quite a growth because of demand for real estate, what can we expect going forward in this front?

We have been doing very well in the retail segment and have grown by almost 10%, in the housing segment we have seen 15% growth and 5% in the vehicle loan. We have verticalised the whole retail segment of the bank with 242 retail asset hubs (RAH), and all our 9,000 odd branches are linked to these. Not only does this reduce tax but also increases the risk management levels and we see quality advantage being done in this regard. Going forward, we feel there is a lot of pent up demand and a lot of unsold inventory too, which we are hopeful of keeping up in the next quarter as well. Our loan to CRE (commercial real estate) has not done well and we would like to correct that in the current quarter.

Also Read | India to soon get a 'Bad Bank' for absorbing NPAs

What will be the bank’s key growth areas going forward?

Salary accounts have largely been with the private sector banks. We are seeing to it that all the salary accounts, wherever we give large finances, also come to us. The efforts in that regard are bearing fruits now. In the month of March or April, we are coming up with a mobile app where the customers will be getting about 240 apps in a bundle.

Moving to the National Asset Reconstruction Company Limited, you are the lead sponsor with a 12% stake, how much NPA has gone to it?

We have identified about 12 accounts with a book liability of Rs 3,586 crore and will refer these non-performing assets (NPA) to the newly constituted bad bank in the first phase in April. However, nothing has gone into NARCL as of now.

Through the Insolvency & Bankruptcy Code (IBC), how much bad loan has been recovered?

In the current year, we have not done much except for the few large companies in the steel industry such as Bhushan Power & Steel. Through the resolution and liquidation process, we have recovered almost Rs 2,283 crore from about 81 accounts in the 9 months of the current financial year from NCLT with about Rs 487 crore worth of haircut. In the ongoing quarter, we expect to recover close to Rs 300 crore.

Provisions have come down by 35.56% to Rs 2,946 crore year on year. Comments on that?

We have increased our provision coverage ratio (PCR) to 83.26%. During the year the government came out with so many resolution frameworks and schemes such as Emergency Credit Line Guarantee Scheme (ECLGS) to aid businesses and loan processes also.

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