Punjab National Bank (PNB) is hoping to close the June-quarter accounts, showing loan recoveries of around Rs 8,000 crore, compared to Rs 5,618 crore it had recovered from non- performing loan accounts during the entire 2017-18 financial year.
While the bank has stepped up efforts, a part of the reason for the spike is resolution of cases through the Insolvency & Bankruptcy Code (IBC) which will help the bank report recoveries of close to Rs 3,500 crore during the first quarter, said sources. The bank is hoping that loan recovery from nine NPA accounts that will be decided soon by the National Company Law Tribunal (NCLT), will help it recover around Rs 3,300 crore over the next three-four months.
“At the current pace, we will be able to close the first half with recoveries of around Rs 20,000 crore,” said an executive.
The Delhi-headquartered lender has been hit by a Rs 14,000 crore fraud by diamond traders Nirav Modi and his uncle Mehul Choksi, who have fled the country. The largest-ever fraud has accentuated the problem for the bank, which reported record losses of over Rs 13,400 crore in the March quarter. It will book further losses from the embezzlement during the June and September quarters, which will put pressure on the bank’s overall performance.
PNB managing director Sunil Mehta had told TOI that he is banking on recovery of loans to shore up the bank’s balance sheet and the country’s second largest public sector lender has initiated a series of steps in this direction.
A one-time settlement scheme was also launched for NPA accounts with outstanding balance of up to Rs 25 crore, which is likely to contribute to the bank’s recovery in the second quarter.