India's largest bank, the State Bank of India (SBI), will hold a record online auction this weekend to sell repossessed flats, warehouses and offices worth a total of nearly $200 million as the state lender seeks to chip away at its $10 billion mountain of bad debt.
www.sevagiri.com
The SBI auction will be the biggest nationwide online sale to date and is a rare public move to turn distressed loans into ready cash.
It comes weeks ahead of rule changes that will force banks to take on much larger provisions for such loans, with what were previously labelled as restructured debts being reclassified in accounts as bad debt.
Including both bad and restructured debt, more than a tenth of Indian bank loans have soured. India Ratings and Research, part of the Fitch agency, estimates impaired loans could hit 13 percent of the total by March next year.
That has left debt-burdened banks scrambling for cash, even resorting to flash sales of repossessed properties that on their own can be worth as little as a few thousand dollars.
"We are now a lot more aggressive," said Parveen Kumar Malhotra, a deputy managing director at SBI, who leads a special unit managing stressed assets.
"We are in a better position to do all the things required, from (phone) calls to auctions and everything in between, including legal cases."
Source - Mumbai Mirror
www.sevagiri.com
The SBI auction will be the biggest nationwide online sale to date and is a rare public move to turn distressed loans into ready cash.
It comes weeks ahead of rule changes that will force banks to take on much larger provisions for such loans, with what were previously labelled as restructured debts being reclassified in accounts as bad debt.
Including both bad and restructured debt, more than a tenth of Indian bank loans have soured. India Ratings and Research, part of the Fitch agency, estimates impaired loans could hit 13 percent of the total by March next year.
That has left debt-burdened banks scrambling for cash, even resorting to flash sales of repossessed properties that on their own can be worth as little as a few thousand dollars.
"We are now a lot more aggressive," said Parveen Kumar Malhotra, a deputy managing director at SBI, who leads a special unit managing stressed assets.
"We are in a better position to do all the things required, from (phone) calls to auctions and everything in between, including legal cases."
Source - Mumbai Mirror
No comments:
Post a Comment