India Markets close in 2 hrs 10 mins

PNB to auction NPAs worth over Rs 1,000 crore on June 27

1 / 1

PNB to auction NPAs worth over Rs 1,000 crore on June 27

As per the auction notice, PNB is looking to sell the accounts to banks, asset reconstruction companies (ARCs), non-banking financial companies (NBFCs) and financial institutions

Public sector lender Punjab National Bank (PNB) has reportedly put on sale six non-performing assets (NPAs) worth over Rs 1,000 crore, including two accounts of Vandana Vidyut and Visa Steel, which will be auctioned on June 27.

Vandana Vidyut Steel has to repay Rs 454.02 crore, while Kolkata-based Visa Steel has an outstanding debt of Rs 443.76 crore, according to news agency PTI. The four other assets which has been put on block includes, Temptation Foods, Helios Photovoltaic, Cabcom Cables, and Zoom Vallabh Steel.

"We intend to place the (six accounts) for sale to ARCs/NBFCs/Other Banks/FIs etc," according to a notice issued by the PNB.

The reserve price for the six non-performing assets has been fixed at Rs 342 crore.

The bank is looking to sell the accounts to banks, asset reconstruction companies (ARCs), non-banking financial companies (NBFCs) and financial institutions, as per the auction notice. The bidders can submit their bids through e-auction method, which will take place on the portal of the bank, till June 26.

The bank notified that the sale process will be handled by its stressed assets targeted resolution action (SASTRA) division.

Also Read: PNB net loss narrows to Rs 9,975.49 crore in FY19 on lower provisions; asset quality improves

The scam-hit lender had formed the stressed asset management vertical (SAMV) and SASTRA divisions to recover its non-performing assets. The bank plans to raise Rs 10,000 crore this financial year from sale of non-core assets, rights issue and expected write-backs from two large accounts undergoing insolvency proceedings, the news agency reported.

PNB reported narrowing of its net loss to Rs 9,975.49 crore in the financial year 2018-19, helped by decline in provisions and improvement in asset quality. The state-owned lender had posted net loss of Rs 12,282.82 crore in FY18, after the bank discovered a banking fraud of Rs 14,000 crore which was orchestrated by fugitive billionaire Nirav Modi and Mehul Choksi.

PNB's asset quality improved in FY19 with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - declining to 15.50 per cent versus 18.38 per cent in the previous year. Net NPA also fell to 6.56 per cent as compared to 11.24 per cent in the last fiscal.

(With PTI inputs)

Edited by Chitranjan Kumar

Also read: Noose tightens on Swiss account holders; Details of at least 50 Indians being shared