State Bank of India is looking to recover close to ₹40,000 crore of its stressed assets during the current fiscal.
According to Pallav Mohapatra, Deputy Managing Director, Stressed Assets Resolution Group, SBI, of this (₹40,000 crore), nearly ₹30,000 crore will come through resolution of cases under the IBC (Insolvency and Bankruptcy Code). The remaining ₹10,000 crore will come from other sources such as sale to asset reconstruction companies or through one-time settlements.
“We must have so far filed around 250 cases under the IBC. In these 250 cases, our total exposure will be close to ₹95,000 crore," he told newspersons on the sidelines of a seminar ‘IBC - Evolving Dynamics’ organised by the CII.
Of the ₹95,000-crore worth cases referred to the IBC, the bank’s exposure in the RBI first list was around ₹48,000 crore and close to ₹28,000 crore in the second list. Of these, only two cases have been resolved so far.
“In the case of Bhushan Steel, we have got ₹8,500 crore with a 30 per cent haircut; our claim was around ₹11,500 crore. For the other case, the money has been deposited in an escrow account. Once the court gives the clearance, it will be adjusted," he said.
A majority of the cases undergoing the corporate insolvency resolution process are slipping into liquidation, but the bank does “not have much of worry on that” as it has already made provisions for those accounts, he pointed out.
IBC to stabilise soon
Insolvency resolution is an “evolving process” and should stabilise in the next one to two years, he said.
“The process is still evolving, but it will stabilise soon. And once it does, then all doubts that the stakeholders have (at present) will settle down,” he said.
According to him, 2018-19 will be an “exciting year” for the banking system as well as for SBI. There is likely to be “significant recovery” (from stressed assets) during the current fiscal.