PSU Banks Plan to Sell Rs 2,700 Crore NPAs
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City-based Union Bank of India, Karnataka-based Corporation Bank and Bank of Maharashtra today said they are planning to sell bad loans of Rs 2,700 crore to asset reconstruction companies (ARCs) in this quarter.
Union Bank Chairman and MD Arun Tiwari said his bank is planning to "sell Rs 1,200 crore this quarter. In the first quarter, we had put on block Rs 900 crore, but could not get the right price. In te second quarter too, if only we get the right price we will go ahead".
Similarly, Corporation Bank also said it is planning to sell some of its bad loans.
"From the last two years, we were holding bad loans, but now we thought some of these assets can be sold to ARCs.
We may look at selling around Rs 1,000 crore of bad loans in this quarter itself," Corporation Banks Chairman and MD S R Bansal told reporters today.
The bank may also look at selling higher amount of non-performing loans to ARCs later in the year, Bansal said.
In the quarter ended June 30, 2015, the bank's gross NPAs stood at 5.43 per cent as against 3.96 per cent in the same period last year.
Similarly, Bank of Maharashtra chairman and MD Sushil Muhnot also said the bank is planning to offload Rs 500 crore of bad loans in the first week of September.
Meanwhile, Corporation Bank also revised its base rate to 9.9 per cent from 10 per cent earlier with effect from today.
Mr Bansal said reduction in base rate will not affect its margins as bank has already reduced its cost of deposit rates.
"This will not have any impact. In fact, we had done due diligence. We had Rs 9,000 crore of excess liquidity. We are concentrating on reducing bulk deposit," he said.
He said since corporate credit is not picking up, the bank is focusing on MSME, retail and agriculture sectors, where there is growth.
In this fiscal, the bank is targeting a credit and deposit growth of 12 per cent. (NDTV)
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