IDBI not selling bad loans to ARCs; PNB thinks of new ways

Even as they sit on mountain of bad loans, public sector lender IDBI Bank today said it's not selling stressed loans to ARCs, while its larger peer PNB said it prefers innovative ways to tackle the situation.
"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 told reporters on the sidelines of the annual bankers summit Fibac here.
On the other hand, the newly-appointed PNB managing director and chief executive Usha Ananthasubramanian said it will look at innovative ways to deal with NPAs, along with 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 at the same event.
However, she did not quantify the quantum of loans the bank is planning to sell to ARCs.
Importantly, both these banks have reported spike in bad loans in the past quarters.

PNB had 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.

The third largest state-run bank's gross non-performing assets stood at 6.47 per cent and net NPAs at 4.05 per cent.
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.