Stating that selling bad loans to ARCs is not the only way to recover bad loans, 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 are looking at the new dispensations and the methodologies allowed to us. We need to look at new approach while dealing with NPAs," she told reporters on the sidelines of the annul banking summit Fibac here.
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.
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PNB reported a steep 49 per cent fall in net profit at Rs 721 crore in Q1 of this fiscal due to increased bad loans and higher provisions for NPAs which almost doubled to Rs 1,811.4 crore from Rs 927.61 crore in the year ago quarter.
On the other hand, IDBI Bank reported 27 per cent increase in net profit at Rs 135 crore despite a spike in gross non-performing assets which rose 31 per cent to Rs 14,112 crore or at 6.64 per cent from 5.64 per cent.