Banks

IDBI Bank creates new department to manage bad loans

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In its efforts to handle the issue of bad loans and monitoring credit, State-owned lender IDBI Bank has introduced a special department.

“At the head office level, we have set up a separate department what we call it a Non-Performing Asset (NPA) management and credit monitoring group. It consists of experienced people from both corporate and retail. They are giving focused attention on each case (of NPA),” said Pothukuchi Sitaram, Executive Director, IDBI Bank.

“We are working with other banks to make some of the assets live and put them into the stream,” he added.

The Reserve Bank of India (RBI) last month had put the bank under watch by directing a Prompt Corrective Action against it, a move that placed various restrictions on the lender including on fresh loans and dividend distribution.

“We would rather show our performance for the next six months or nine months. By then, we are hopeful of getting better interest rate (for bonds). So accordingly we will plan for that. By that time we will be getting some divestment gains (of non-core assets) and also capital infusion from the government which will also improve the investor confidence,” Sitaram added.

“So the prudent time (for all the activities) will be Q3 or Q4 (of the current fiscal),” he said.

IDBI Bank’s annual loss for 2016-17 has widened to Rs 5,158 crore, as against Rs 3,665 crore in the previous fiscal.

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