Smaller PSBs beat giants in dash to NCLT, Bank of Baroda tops with 55 cases
Smaller banks have been more agile in the initial days of the Insolvency framework by moving more cases to the National Company Law Tribunal (NCLT). While among the large banks Bank of Baroda led the list, Uco Bank, Bank of Maharashtra, and Dena Bank have initiated more NCLT proceedings than their larger rivals such as State Bank of India and Punjab National Bank. SBI, however, led the list in terms of value having initiated 18 cases with Rs 340.97 billion at stake, as of September 30. In all total amount assets under these proceedings as of September 30, stood at Rs 1.07 trillion. The total number of cases stood at 330. there could be many common cases, where more than one lender is involved.
Business Standard compiled these details from responses obtained through Right to information (RTI). While seventeen banks shared the details under RTI, Indian Overseas Bank and IDBI Bank refused to share the details citing commercially sensitive nature of the information. The Reserve Bank of India said it did not have bankwise data and forwarded a request for aggregate bank-wise details to NCLT, which did not share any response till date.
Bank of Baroda, which had 0.53 million NPA accounts worth Rs 463 billion, reported the highest number of NCLT proceedings initiated as of September at 55 cases. The total amount of NPAs under these proceedings stood at Rs 122.94 billion. Bank of India, with Rs 520 billion NPAs, said it had 51 cases before NCLT with total outstanding of Rs 148.56 billion. It added that 16 of these cases are part of RBI’s second list of cases to be sent for insolvency resolution. The bank said while three of these have already been initiated, the rest would be done by December 31. Even as the second list is slowly knocking the NCLT doors, resolutions for first list are still far from done.
In June, RBI had directed banks to initiate insolvency proceedings against 12 large accounts that accounted for nearly a quarter of the total bad assets in the banking system. Some of these proceedings which started six months ago, have gone into the 90 day extension. Others might follow suit. All the stakeholders including bankers, borrowers, bidders, regulators and professionals have gone through a steep learning curve as several complexities have come up. For example, there was the issue of large number of homebuyers in the Jaypee Infratech case. There was a legal challenge by Essar Steel and later came the ordinance to block habitual offenders from bidding for the companies.
Canara Bank said in its RTI reply that though it has initiated only one such proceeding, the number of proceedings it is involved is 66 with Rs 146 billion worth NPAs riding on these. Among the smaller public sector lenders, Uco Bank said it had initiated 30 cases with Rs 72.65 billion assets under these proceedings. Bank of Maharashtra said it was COC (committee of creditors) member in 28 cases with Rs 52.96 billion assets.
Dena bank said it had initiated 23 cases with Rs 33.6 billion bad loans as of September. This was almost same as PNB, the second largest public sector lender had initiated 23 cases worth Rs 34 billion. Andhra Bank said it had Rs 57.66 billion NPAs under NCLT proceedings initiated by others. It had moved NCLT in four of its restructured assets which had a ‘shadow balance’ of Rs 12.58 billion. Allahabad Bank, Indian Bank, Corporation Bank, Oriental Bank of Commerce, Punjab and Sind Bank and Sidbi also reported single digit cases.