Private sector lender Axis Bank on Friday said 12 companies — part of Reserve Bank of India’s (RBI) second list of defaulters — owe it Rs 2,492 crore. While Rs 1,843 crore is in the form of funds-based exposure, the rest was not based on funds.The bank said in a regulatory filing around 75% of the outstanding is secured and the bank has already set aside Rs 862 crore as provisions. Jairam Sridharan, chief financial officer, told a business news channel that it loans are secured, banks require 50% provisioning and for the unsecured portion, they require a 100% provisioning.
Asked if he expects resolutions before the RBI deadline, Sridharan said a few would be resolved, but most of them will have to be referred to the National Company Law Tribunal (NCLT). The central bank had advised banks on August 28 to finalise and implement viable resolution plans in select accounts by December 13, failing which insolvency proceedings should be initiated against borrowers. The new list, bankers said, includes Videocon Industries (gross debt of Rs 47,554 crore), IVRCL (Rs 3,579 crore), Uttam Galva Steels (Rs 5,041 crore), Soma Enterprises (Rs 1,895 crore) and Asian Colour Coated Ispat (Rs 3,019 crore).
Previously in June, the RBI had asked banks to initiate the insolvency resolution process in 12 accounts under the provisions of the Insolvency and Bankruptcy Code, 2015 (IBC). The RBI had added that details of the resolution framework, in regard to the other non-performing assets (NPAs), would be released in coming days. Axis Bank had said in June that it has exposure to eight of the 12 accounts mandated by the RBI to be sent to the NCLT. The bank had said while its total funds-based outstanding on the eight accounts stood at Rs 5,071 crore and non-fund based outstanding was `212 crore, around 80% of the outstanding was secured.