Axis Bank has exposure on 12 accounts in RBI's second list of defaulters

Key Highlights: 

• Axis Banks exposure on 12 accounts in second list of defaulters
• Axis Banks 75% of the outstanding was secured
• Axis Bank has made provisions of Rs 862 crore for these accounts

On the Reserve Bank of India's (RBI) second list of defaulters, Axis Bank on Friday stated the bank had exposure on 12 of these accounts. 

Axis Bank said, "RBI issued directions in their communication dated August 28, 2017, advising banks to finalize and implement viable resolution plan in select accounts by 13th December, 2017."

For which insolvency proceedings should be initiated in all accounts mentioned in the communication and accordingly mandated provisions should be made by March 31, 2017, stated Axis Bank. 

Following the guidelines of RBI, as per Axis Bank it has exposure on 12 twelve of the identified defaulters. 

Total fund based outstanding of the bank on these accounts stands at Rs 1,843 crores, while non-fund based outstanding was at Rs 649 crores as on June 30, 2017. 

Among these, 75% of the outstanding was secured. Against this outstanding, Axis Bank has made provisions of Rs 862 crores. 

As on June 2017, Axis Bank's gross NPAs stood at 5.03% compared to 2.54% in Q1FY17 and 5.04% in Q4FY17. In value terms gross NPAs were at Rs 22,030.87 crore as gainst Rs 9,553.17 crore in Q1FY17 and Rs 21,280.48 crore in Q4FY17.

On August 29, many media reports stated that RBI has sent to the banks a second list of defaulters for taking it towards National Company Law Tribunal (NCLT) for initiating insolvency and bankruptcy proceedings. 

As per CNBC-reports, the central bank has sent banks the second list of over 40 large corporate defaulters. 

Companies like Videocon,  IVRCL, Visa Steel,  Uttam Galva, Castex, Jayswal Neco, Ruchi Soya, Nagarjuna Oil & Orchid Chemicals, East Coast Energy, SEL Manufacturing, Soma Enterprises, Asian Colour, Ispat Coated and Unity Infraprojects are speculated to be under the second list. 

On June 13, 2017, as a part of NPA resolution, RBI through its Internal Advisory Committee (IAC)  recognized 12 accounts under Insolvency & Bankruptcy code (IBC). 

12 defaulters were - Bhushan Steel, Lanco Infratech, Essar Steel, Bhushan Power & Steel, Alok Industries, Amtek Auto, Monnet Ispat, Electrosteel Steels, Era Infra Engineering, Jaypee Infratech, ABG Shipyard and Jyoti Structures.

Even in this first list defaulters, Axis Bank had exposure in 8 accounts as on March 31, 2017. The bank was directed y RBI on June 15, 2017 to initiate insolvency resolution process

According to Axis Bank,in these 8 accounts it had  total outstanding of the bank on these accounts stood at Rs 5,071 crore. While non-fund based outstanding was at Rs 212 crore as on March 2017.

RBI has decided to bring accounts who have more than Rs 5,000 crore debt towards insolvency proceedings - where 60% or more exposure was already classified as NPA by banks as on FY16. 

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