SBI, UCO Bank look for buyers to clear-off Rs 1,245 crore NPAs: Report

SBI and UCO Bank are looking for buyers to sell non-performing accounts (NPAs) worth Rs1,245 crore and have invited bids from ARCs, banks, NBFCs and FIs to clean their books of such dud assets.
“In terms of bank’s revised policy on sale of financial assets in line with the regulatory guidelines, we place Zenith Birla (India) Ltd and Sona Alloys Pvt Ltd for sale to ARCs/banks /NBFCs/FIs,” SBI said in the bid document. Sona Alloys has an...
outstanding of Rs647.64 crore towards SBI, while Zenith Birla has Rs139.36 crore. It has asked the interested parties to place their expression on 12 March and the process of e-bidding will take place on 23 March.
UCO Bank, based out of Kolkata, said it has identified about 13 NPA accounts with outstanding balance of Rs457.98 crore and has invited expression of interest from asset reconstruction companies (ARCs), banks, financial institutions (FIs), non-banking financial companies (NBFCs) for the proposed sale of its NPAs by 13 March.
Last week also, SBI along with United Bank of India and long-term infrastructure lender IFCI have put up on sale a number of NPA accounts to recover Rs16,349 crore loans given to various companies.
The gross non-performing assets (NPAs) of all the banks in the country amounted to Rs8.41 lakh crore at end-December, bulk of which is in the books of public sector banks (PSBs). Thus, the PSBs have in the recent past expedited their loan recovery process, specifically against those loans that have turned bad.
Several mechanisms like referring cases of NPA accounts to National Company Law Tribunal (NCLT) to recover dues as well as selling bad loan accounts to asset reconstruction companies (ARCs)/banks/FIs/NBFCs.

Recent fraud case involving Nirav Modi and Mehul Choksi has increased the pressure for privatisation of public sector banks that have a huge problem of non-performing assets. Earlier, experts and industry bodies urged government to move in this direction.

Chief Economic Adviser Arvind Subramanian has come out in support of demand for privatisation of public sector banks. Speaking at the Annual Convention 2018 of Madras Management Association recently, Subramanian suggested that the government should bring in private players in public sector banks to make them more disciplined.

According to the RBI data published in December last year, bad loans of public sector banks (PSBs) stood at Rs 7.34 lakh crore by the end of September 2017. The public sector banks have higher NPA also because they account for about 87 per cent of the total assets of the banking system.

State Bank of India (SBI) has the heaviest NPA load at Rs 1.86 lakh crore. The SBI is followed by Punjab National Bank with NPA of Rs 57,630 crore - most likely to worsen after Nirav Modi-Mehul Chokis fraud case - and Bank of India, whose NPA on September 30 last year stood at Rs 49,307 crore. Bank of Baroda had an NPA of Rs 46,307 crore, Canara Bank of Rs 39,164 crore and Union Bank of India of Rs 38,286 crore.