 "Despite rising NPAs, PNB, IDBI not to sell bad loans to ARCs")
Even as they sit on mountains of bad loans, two large public sector lenders--PNB and IDBI Bank-- today said they are not planning to sell any stressed loans to asset reconstruction companies (ARCs) citing pricing issues and also they expect to recover the money from these accounts through innovative ways.
Stating selling bad loans to ARCs is not the only way to recover bad loans, the newly-appointed PNB managing director and chief executive Usha Ananthasubramanian said there are more innovative ways to deal with NPAs than an outright sale to ARCs.
"There are traditional methods of attacking bad loans, we need to get a bit more innovative. We're looking at the new dispensations and the methodologies allowed to us. We need to have look at new ways of approach while dealing with NPAs," she told reporters on the sidelines at the annul banking summit Fibac here.
Similarly, IDBI Bank also said it is not looking at approaching the ARCs to dispose of its mount of bad loans.
Importantly, both these banks have reported spike in bad loans in the past quarters.
"At this juncture, we are not thinking of going to ARCs because the ARC market is not that good and also because of the low rates being offered in the market," IDBI Bank's newly-appointed managing director and chief executive Kishor Kharat said.
Significantly it can be noted that these two banks have reported increase in their bad loans in the past quarter.
PNB had reported a steep 49 per cent fall in net profit at Rs 721 crore in Q1, due to increased bad loans and higher provisions for bad loans which almost doubled to Rs 1,811.4 crore from Rs 927.61 crore in the year ago quarter. Its gross non-performing assets stood at 6.47 percent and net NPAs at 4.05 percent.
On the other hand IDBI Bank had reported a 27 per cent increase in net profit at Rs 135 crore despite a spike in gross non-performing assets rose 31 per cent Rs 14,112 crore or at 6.64 per cent from 5.64 per cent.
Stating selling bad loans to ARCs is not the only way to recover bad loans, the newly-appointed PNB managing director and chief executive Usha Ananthasubramanian said there are more innovative ways to deal with NPAs than an outright sale to ARCs.
"There are traditional methods of attacking bad loans, we need to get a bit more innovative. We're looking at the new dispensations and the methodologies allowed to us. We need to have look at new ways of approach while dealing with NPAs," she told reporters on the sidelines at the annul banking summit Fibac here.
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Similarly, IDBI Bank also said it is not looking at approaching the ARCs to dispose of its mount of bad loans.
Importantly, both these banks have reported spike in bad loans in the past quarters.
"At this juncture, we are not thinking of going to ARCs because the ARC market is not that good and also because of the low rates being offered in the market," IDBI Bank's newly-appointed managing director and chief executive Kishor Kharat said.
Significantly it can be noted that these two banks have reported increase in their bad loans in the past quarter.
PNB had reported a steep 49 per cent fall in net profit at Rs 721 crore in Q1, due to increased bad loans and higher provisions for bad loans which almost doubled to Rs 1,811.4 crore from Rs 927.61 crore in the year ago quarter. Its gross non-performing assets stood at 6.47 percent and net NPAs at 4.05 percent.
On the other hand IDBI Bank had reported a 27 per cent increase in net profit at Rs 135 crore despite a spike in gross non-performing assets rose 31 per cent Rs 14,112 crore or at 6.64 per cent from 5.64 per cent.