 "SKS expects to recover most of its Rs 1,350 cr NPAs")
"The entire amount to be recovered from AP will go to the bottom line of the company's balance sheet substantially enhancing SKS's net profit in the current financial year", sources familiar with the development told Business Standard on Tuesday.
The company is now awaiting to receive the copy of the interim order so as to resume its operations in AP. SKS top executives refused to comment stating that they were yet to receive the order copy.
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The apex court has issued an interim order on Monday allowing SKS to resume microlending operations in AP without securing a no-objection certificate from the state government.The court, however, said that SKS should not resort to coercive recovery practices and the interest payable should not exceed the principle amount.
Sources said that these two concerns have already been addressed by the Reserve Bank of India (RBI), which had stepped following a crisis in the MFI sector in the state.
Besides fixing a cap of 26% on interest rate, the RBI had imposed a maximum individual borrowing limit of Rs 50,000. To curb questionable recovery practices, the banking regulator stipulated that all customer connectivity should happen at a public place.
Recovery and lending operations of the MFIs have by and large come to a halt in AP after the state government promulgated "The Andhra Pradesh Micro Finance Institution (Regulation of Money Lending) Ordinance 2010" .
The ordinance, which had been subsequently enacted as law, was mainly aimed at curbing what was termed as questionable lending and recovery practices.
Though most of the MFIs in the state plunged into losses following the ordinance, SKS had been the worst affected.