Following the successful resolution of Bhushan Steel, fraud-hit Punjab National Bank (PNB) is hopeful of £800 million recovery from bad loans in the first quarter of the current fiscal. With its primary focus on recovery of dues from defaulters, the bank has managed to surpass the total amount recovered in the last fiscal in the first two months of the current financial year, a senior bank official said.
“This is due to renewed focus on recovery by public sector banks, including referral of many cases to NCLT under the bankruptcy code is forcing many of the defaulting companies to settle their NPAs. While PNB had recovered £561.75 million in the whole of last year, the bank's recovery stands at £600 million by the first week of June,” the official said. They said that PNB expects to complete recovery of almost £800 million by the time this quarter ends. They also added that large corporates like Religare, Arcotech and Surya Alloys have recently settled bad loans worth £35 million in the last two months via recovery camps set up by PNB.
PNB posted loss of £1.34 billion for the fourth quarter ended March, 2018, the biggest ever by any domestic lender. The bank last month said it provided for £717.8 million, 50 per cent of the total amount of £1.44 billion in the quarter of 2017-18, with regards to the loss incurred on account of Nirav Modi fraud. PNB said the remaining amount will be covered in the three quarters of the current fiscal year. It further said it has paid £658.61 million to other banks to discharge its liabilities towards Letters of Undertaking (LoUs) and Foreign Letters of Credits (FLCs) issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with CBS (core banking solutions).
“The stressed assets vertical has started operating from June 1. Four general managers from the corporate office have been tasked with heading the recovery vertical as part of the bank's management strategy to fast track recovery of NPAs,” the official said.