M/s.Varunsaravana Textiles India Pvt. ltd & ors V/S SBI

IA 1471 /2011
 IN  
AIR (SA )959 /2011


(SA 228 /2011 on the file of DRT Madurai)

IA-1471/2011(delay) - Ld.  Counsel ShriPandurangan files vakalat on behalf of the Respondent. 

Ld.  Counsel Shri Balasubramanian appearing on behalf of the petitioner drew the attention of this tribunal to the averments made in the affidavit filed in support of the application and more particularly to paragraph 20 and stated that the delay has been properly explained.

 The Ld.  Counsel stated that the auction is scheduled on 5.12.2011 and that if the propertyis sold the petitioner would be put to great hardship.  

The Ld.  Counsel added that the value of the property is approximately four times the dues and if the auction is conducted some unscrupulous elements may knock away the property and that the same would cause great loss to the petitioner. 

 Ld.  Counsel stated that pending disposal of this IA interim orders of stay may be passed to protect the interests of the petitioner who is only interested and willing to settle the dues of the bank.  

The Ld. Counsel reiterated that the petitioner is ready and willing to settle the matter and is only praying for time with the bank for clearing all the dues by selling away its other properties.

Ld.  Counsel Shri Pandurangan appears on behalf of the respondent bank and filed counter setting out therein the details of the defaults committed by the petitioner and stated that the petitioner is not entitled to any relief from this tribunal more particularly when the application for condonation of delay of 38 days is pending. 

The Ld.  Counsel stated that the bank has taken lot of efforts to recover the public money and if the sale is stopped at this stage the bank would be put to great hardship and the recovery of the public money would be thwarted.  

The Ld.  Counsel prayed that no orders in the nature of interim orders restraining the bank be passed in this case. 

Heard the Ld.  Counsel.

This is an IA filed for condonation of delay of 38 days.  It is seen that the auction sale is to be conducted on 5.12.2011 and there is no time left for taking up the IA for disposal and there is also a need to protect the interest of the borrower who has categorically stated that it is settling the dues of the bank in an amicable manner soon and therefore this tribunal is driven to pass the following order:

“The petitioner is directed to pay a sum of Rs.50 lakhs into this tribunal on or before 31.1.2012.

The respondent bank may receive the tenders as notified but shall not open the same till6.2.2012 and shall also await the further orders of this Tribunal.

Call this IA for verification on 7.2.2012”.

The Hon'ble Chairperson of DRAT ,Chennai passed  this Order on 2nd Dec 2011

Banks' gross NPAs to rise 3-fold: CLSA

 


Source  : The Financial Express : Nov 29, 2011 at 1215 hrs IST
Gross non-performing assets (NPAs - loans gone bad) of Indian banks are likely to rise three-fold to 4.6 percent by March 2014 from 2.4 percent in March 2011, said CLSA
.

Multiple headwinds to capital expenditure cycle in the country will adversely impact loan and fee growth of the banks. The research house expects the sector's credit growth to moderate to 16 percent over FY13.

We lower sector earning estimates for banks by 3 percent for FY12 and 9 percent for FY13 on the back of a cut in loan growth and fee growth as well as higher loan loss provisioning, said CLSA in a note.

The research house remains bullish on prospects of ICICI Bank and HDFC Bank and is underweight on most public sector banks except Bank of Baroda.

Debt recovery camp held

Source ; The Hindu :27 Nov 2011






A sum of Rs.9.68 lakh was recovered from 30 customers
 at a debt recovery camp 
organised by the State Bank of India at Pavunjur recently.


 Regional Manager – V, Chennai, M.Vijayakumar 
said fresh loans would be sanctioned and 3 per cent subsidy 
would be extended for the financial year 2011-12 for
 those who make prompt repayment of loans.

Steep rise in NPAs

Source :rediff com:22 Nov 2011


Bad loans are turning nightmarish for Indian banks. A steep rise in interest rates over the past 18 months has led to a sharp increase in non-performing assets.


Non-performing assets, or NPAs, are assets which are categorised by a bank or a financial institution as sub-standard, doubtful or loss assets as they do not yield any returns to them.


The Reserve Bank of India has increased its lending (repo) rate 13 times since March, 2010 to tame inflation.


Moody's has assigned Baa3, the lowest investment grading rating, to India. The rating agency downgraded the outlook for the Indian banking system to 'negative' from 'stable' saying that economic slowdown would impact asset quality, capitalisation and profitability.


However, Standard & Poor's upgraded the Indian banking sector saying its domestic regulations are in line with international standards and said the Reserve Bank has a moderately successful track record.


The gross non-performing assets (NPAs) of 37 listed banks has gone up to Rs 1.06 lakh crore (Rs 1.06 trillion) during the September quarter from Rs 79,078 crore (Rs 790.78 billion) in the corresponding period last year.


The banks are also under pressure from loans outgoes to the sectors facing inordinate delays in execution of projects, raising concerns over the companies' ability to repay loans on time.


Loans given to mining, power and realty companies might become NPAs for the banking sector due to the delay in completion of projects.


1. State Bank of India 


Net NPAs: Rs 12,347.90 crore
Gross NPAs: Rs 25,326.29 crore


The gross non-performing assets (NPAs) of public sector banks increased by 20 per cent during June-September 2011.


Standard & Poor's, which had in September downgraded standalone ratings of State Bank of India, said high credit risks in the Indian banking sector reflects that the country has a weak payment culture and legal system that often result in low recoveries and delayed settlement of foreclosures.


(NPA figures are for the year ended March 2011, Source: RBI)




2. ICICI Bank


Net NPAs: Rs 2,407.36 crore
Gross NPAs: Rs 10,034.26 crore


ICICI Bank has the highest NPAs among private sector banks. ICICI Bank has slightly improved its net bad debts to 0.90 per cent from 0.91 per cent in the earlier quarter.


Indian banks face challenges like increase in interest rates on saving deposits, a tighter monetary policy, restructured loan accounts and increasing infrastructure loans.


3. Canara Bank


Net NPAs: Rs 2,347.33 crore
Gross NPAs: Rs 3,089.21 crore


Canara Bank's gross NPA ratio increased to 1.73 per cent (Rs 3,793 crore) for the quarter ending September 30 from 1.49 per cent (Rs 2,636 crore) in the year-ago period. The net NPA ratio stood at 1.43 per cent (Rs 3,117 crore) in September.


4. Punjab National Bank 


Net NPAs: Rs 2,038.63 crore
Gross NPAs: Rs 4,379.39 crore


The NPAs of Punjab National Bank (PNB) rose by 29 per cent during the July-September quarter to Rs 5,150 crore.


5. Bank of India


Net NPAs: Rs 1944.99 crore
Gross NPAs: Rs 4,811.55 crore


The bank's gross non-performing assets (npas) stood at 3.02 per cent, up 33 basis points sequentially, while net NPAs stood at 1.98 per cent, up 71 basis points sequentially.


6. UCO Bank 


Net NPAs: Rs 1,824.55 crore
Gross NPAs: Rs 3,150.36 crore


As NPAs mount, UCO Bank is eyeing a 20 per cent growth in its business and a reduction in its non-performing assets (NPAs) to less than 3 per cent in FY12.


7. Union Bank of India


Net NPAs: Rs 1,803.44 crore
Gross NPAs: Rs 3,622.82 crore


The system based NPA recognition method has led to a rise NPAs. Compared to the manual method, the system based study gives an accurate picture of bad loans. 


However, the Union Bank is optimistic about cutting down NPAs. It expects gross NPAs to be below 3 per cent in the coming quarter.


8. IDBI Bank


Net NPAs: Rs 1,677.91 crore
Gross NPAs: Rs 2,784.73 crore


While IDBI's gross NPA rose to 2.47 per cent from 1.88 per cent, net NPA shot up to 1.57 from 1.19 per cent in the second quarter.


9. Indian Overseas Bank 


Net NPAs: Rs 1,328.42 crore
Gross NPAs: Rs 3,089.59 crore




The gross NPA stood at Rs 3,090 crore in March 2011, as against Rs 3,611 crore in March 2010. 


In percentage terms, the gross NPA ratio was 2.72 per cent as on March 2011 compared to 4.47 per cent in March 2010.


10. Syndicate Bank


Net NPAs: Rs 1,030.84 crore
Gross NPAs: Rs 2,598.97 crore




While the net non-performing assets (NPAs) increased to Rs 1,052 crore for the second quarter ended September, as against Rs 917 crore in the year-ago period, the percentage of net NPA declined marginally to 0.93 per cent, as against 0.97 per cent in the same period last year.


11. Oriental Bank of Commerce


Net NPAs: Rs 938.15 crore
Gross NPAs: Rs 1,920.54 crore


Oriental Bank of Commerce saw more than 50 per cent rise in NPAs in the September quarter
.
12. Central Bank of India


Net NPAs: Rs 847 crore
Gross NPAs: Rs 2,394 crore


In the July-September quarter, the bank's gross non-performing assets (NPA) as a percentage of total advances rose to 2.94 per cent from 2.28 per cent in the same quarter a year ago.


Its net NPAs rose to 1.37 per cent of total loans from 0.68 per cent in the year-ago period.


13. Bank of Baroda 


Net NPAs: Rs 790.88 crore
Gross NPAs: Rs 3,152.50 crore


The Bank succeeded in restricting its incremental delinquency ratio to 1.09 per cent, gross NPAs to 1.36 per cent and net NPAs to 0.35 per cent during 2010-11. 


The Bank's Loan Loss Coverage Ratio (including technical write-offs) too stood at the healthy level of 85 per cent as on 31st March 2011.


14. United Bank of India


Net NPAs: Rs 757.41 crore
Gross NPAs: Rs 1,355.78 crore


United Bank of India has introduced a system of monitoring the collection of NPA and collecting information all branches. 


It has also recruited more recovery agents for faster recovery of NPAs.


15. Vijaya Bank


Net NPAs: Rs 741.16 crore
Gross NPAs: Rs 1,355.78 crore


Banks have been witnessing substantial bad loans in the agricultural sector.


16. Allahabad Bank


Net NPAs: Rs 736.37 cr
Gross NPAs: Rs 1,647.92 cr


A large portion of the NPAs are from agriculture and SME sector. The bank is hopeful of a fast recovery in the next six months


17. State Bank of Patiala


Net NPAs: Rs 620.77 crore
Gross NPAs: Rs 1,381.68 crore


The business of State Bank of Patiala has grown manifold since its establishment. There are more than 1000 branches of SBP.


18. Bank of Maharashtra


Net NPAs: Rs 618. 95 crore
Gross NPAs: Rs 1,173.70 crore


Bank of Maharashtra is now taking fresh initiatives to further bring it down to 2 per cent this fiscal. 


From Rs 1,468 crore in September 2010, the gross NPA of the bank was slashed to Rs 1,174 crore as on March 31, 2011.


19. State Bank of Hyderabad


Net NPAs: Rs 562.72 crore
Gross NPAs: Rs 1,150.45 crore


State Bank of Hyderabad's fiscal second quarter (July-September) net profit fell 12.27% to Rs 232 crore from Rs 264 crore in the same period a year ago due to high interest expenditure and increased provisioning for bad loans.


Net NPAs of the bank during the quarter rose to 1.92% as against 0.64% in the same period last fiscal year.


20. Dena Bank


Net NPAs: Rs 54.89 crore
Gross NPAs: Rs 842.24 crore


The bank expects to have a net non-performing asset (NPA) ratio of 1.6 per cent to 1.7 per cent for FY11.

Bad loans of priority sector shoot up in 2010-11

Source : BL :CHENNAI, NOV. 17:2011

Contributed largely by agriculture NPAs

 

RBI's ‘Report on Trend and Progress of Banking in India 2010-11' reveals that the priority sector (to which banks are mandated to disburse 40 per cent of their loans) has accounted for close to three-fourths of incremental bad loans during the year ended March 2011.

The share of outstanding priority sector non-performing assets (NPAs) as a proportion of total NPAs has steadily risen from 46 per cent in 2008-09 to 52 per cent at the end of 2010-11. Priority sector lending includes lending to agriculture, small-scale industries, weaker sections, for housing (of less than Rs 25 lakh) and education.

AGRI SECTOR LEADS

Much of the rise can be attributed to the increased share of bad loans from agriculture sector during this period. The share of agriculture NPAs to total NPAs is at 18.7 per cent in March 2011, up from 11.7 per cent in 2008-09.

This performance of the last two years has come after the agriculture NPA portfolio fell by 27 per cent year-on-year in 2008-09, partly due to the debt waiver. .

However, bad monsoon in 2009-10 may be one of the reasons for rise in NPAs. The agriculture NPA-to-total agriculture loans ratio in 2008-09 was 1.9 per cent when the overall gross NPA ratio of all banks was as 2.44 per cent. Since then, the gross NPA ratio of banks has moderated to 2.35 per cent, while the agriculture NPA ratio rose to 3.3 per cent.

LIKELY TO MOVE UP FURTHER

Though the aforementioned data are only up to March 2011, the NPAs of the agriculture sector have risen since in most cases. This can partly be attributable to migration to system-based identification of NPAs. This, coupled with sharp rise in interest costs, increases the likelihood of a further rise in the share of priority sector NPAs in the total NPAs.

PSU banks quicken recovery efforts as NPAs pile up

Source :Press Trust of India / Mumbai November 13, 2011, 14:12 IST
Photo : business line


Following a steep rise in bad assets in the past two quarters, public sector banks say they are devising ways to ramp up recovery in the rest of this fiscal, such as setting up special recovery cells and aggressive follow-up of sticky accounts.


Some banks are even mulling offloading some of the non- performing assets to asset reconstruction companies in the fourth quarter, to clean up the balance sheets.


"We have a high focus on recovery. We have instructed teams of general managers to work towards this. In some cases, we are trying to recover the loan amounts through compromise settlements and one-time settlement schemes," Indian Overseas Bank Chairman and Managing Director M Narendra told PTI.


The Chennai-based public sector lender, which recovered around Rs 600 crore in the first half, aims to recover around Rs 850 crore in the second half, he said, adding that the bank will open 'asset recovery branches' soon.


Gross NPAs of listed banks crossed Rs 1 trillion by the end of the September quarter, a full 33 per cent higher than a year ago, on the back of a hardening interest rate regime, slackening growth in some sectors like steel and mining, along with system recognition of bad assets.
Since March 2010, the Reserve Bank has upped short term lending rates 13 times to tame inflation to 8.5%.


Most of the incremental addition of NPAs has happened in public sector banks, which control 75% of the system.


"Due to system recognition, the flexibility of classifying NPAs is no longer there. So, we start following up a sticky account after 60 days in case of possible defaults," Bangalore-based state-run lender Vijaya Bank's Executive Director Subhalakshmi Panse pointed out.
A standard asset turns a non-performing one if the borrower doesn't service the loan for 90 days.


   
Panse also said a special department is taking care of the bank's recovery efforts now.




Vijaya Bank had a cash recovery of Rs 354 crore in the first half, while it upgraded Rs 890 crore worth of portfolio during the same period.   


Referring to this, a top bank official of IDBI Bank said though his bank can't give a recovery target for the second half, it is looking at recovery on case to case basis.


"Our approach is case to case basis. While some of them are restructured, some are settled though compromise and in others we have to take legal route," IDBI Bank Executive Director Rajkumar Bansal said.


Bankers also said they would take a call by December end whether to offload some of the bad assets to asset reconstruction companies (ARCs).


"We had offloaded around Rs 330 crore of bad assets last financial year to ARCs. Going forward, we will take a call about this," Narendra of IOB said.

As airlines fly into the red, banks shy away

Source :HT Correspondent, Hindustan Times:New Delhi, November 14, 2011

Banks, which already have an exposure of over Rs 80,000 crore to airline majors, are shying away from providing any further financial assistance to the cash-starved sector. Jet Airways and SpiceJet also posted losses recently.


Banks have an exposure of Rs 43,000 crore to Air India,
 Rs 13,000 to Jet and
Rs 7,000 crore to Kingfisher.


 Banks are closely watching the performances of each of the loan accounts.


The gross non performing assets (NPAs) of public sector banks for the period ending March stood at Rs 71,047 crore.


 The figure is set to significantly rise with several corporate loans turning bad.


"We are not in favour of providing any further loan to airline majors, especially in the private sector," a public sector bank chairman told HT.

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