The Hindu Business Line : GTB defaulters keen to settle dues

THE merry-making by chronic defaulters of the erstwhile Global Trust Bank (GTB) is well and truly over. After the revelry was brought to an abrupt halt recently, it's now time to queue up at the cash counter manned by Oriental Bank of Commerce (OBC) to settle the dues.

Barely over a month after OBC took over GTB, the latter's defaulters are making a beeline for the negotiating table to settle their dues.

"There seems to be a great eagerness among GTB's defaulters to settle their dues. People are volunteering to come to the negotiating table," the Chairman and Managing Director, OBC, Mr B.D. Narang, told Business Line.

He said that it is still early days to put a definite figure on the recovery through the negotiations.

"We are hopeful of getting enough recoveries through one time settlements during the current fiscal. But I cannot give out a definite figure at this point," Mr Narang said.

He, however, had earlier gone on record that OBC would attempt to recover at least 30-40 per cent of GTB's non-performing assets (NPAs) during the current fiscal through aggressive recovery efforts.

At the end of March 31, 2004, GTB's non-performing assets (GTB) stood at Rs 1,362 crore, with net NPAs amounting to 19 per cent of their net advances. With a steady decline of the loan portfolio, the RBI had announced a moratorium on the bank followed by its eventual takeover by OBC.

As against, GTB's high level of NPAs, OBC is the only public sector bank that has declared itself as a zero net non-performing asset (NPA) bank for the past two financial years.

Mr Narang said that other than OTS, OBC is also considering rescheduling of loans wherever it is found to be beneficial for the bank.

"We have contacted all the defaulters of GTB. We are willing to work out deals that are mutually beneficial," he said.

He said that taking recourse of the Securitisation Act would be the last weapon against the defaulters.

"We would ideally like to avoid taking action under the Securitisation Act. We would like its recourse Act only if we are convinced that all other options for recovery are exhausted," Mr Narang said.

The Securitisation Act provides lenders the powers to initiate recovery outside the legal process.

It allows banks and financial institutions to attach and auction defaulters' assets after giving them the mandatory notice as stipulated in the Act.

The legislation also provides lenders the powers to change the management of a defaulting company.

More Stories on : Non-Performing Assets | Private Banks

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