Rs17,800 cr PNB bad loans to be put on block; eyes Rs 6,500 cr PNB Housing Finance stake sale

Punjab National Bank (PNB), which was duped of Rs 14,000 crore by diamantaire Nirav Modi and associates, is looking at bad loan sale of Rs 17,800 crore from 159 accounts during this financial year to asset reconstruction companies (ARC), other banks, financial institutions or NBFCs.

The bank is adopting a three-pronged strategy to climb out of its losses by selling its non-core assets, aggressive sale of its non-performing assets (NPAs) and recoveries.

It is expecting Rs 6,500 crore from the sale of its 33% stake in PNB Housing Finance and has put its old corporate house at the posh Bhikaji Cama Place in Mumbai, which is expected to be bought by some government agency.

The bank is looking at a higher quantum of recoveries this year. In the first half of the financial year, the bank hopes to recover about Rs 22,000 crore of bad loans.

The major recovery efforts will be one-time settlements, silent protests or demonstrations in front of premises of recalcitrant borrowers. The bank has also set up dedicated call centres which can call up NPA borrowers of up to Rs 1 crore.

A senior bank official said, “The recovery efforts are going on at all our branches with a co-ordinated efforts from the corporate centre of the bank. We are looking at one-time settlements, recovering through National Company Law Tribunal (NCLT) and direct communication with the promoters.”

Gross NPAs at the end of the quarter ended June 30, 2018, were Rs 82,888.79 crore, rising 43% over the same time last year.