Money & Banking

Bank of India hopeful of ₹1,800-crore write-back from Essar Steel resolution

Our Bureau Mumbai | Updated on March 14, 2019 Published on March 14, 2019

Dinabandhu Mohapatra, MD CEO, Bank of India   -  BUSINESS LINE

In the run-up to the close of financial year 2019, Bank of India is expecting a provisioning write-back of more than ₹1,800 crore from the resolution of Essar Steel assets and an inflow of ₹400-500 crore from the sale of non-core assets.

The public sector bank has made 100 per cent provisioning towards the Essar Steel account. Bank of India (BoI) MD and CEO Dinabandhu Mohapatra said: “Our bank’s provision coverage ratio (PCR), at 76.6 per cent, is the highest in the banking industry. We are quite hopeful of a write-back of more than ₹1,800 crore from the resolution of this account.”

BoI’s non-core assets include STCI Finance and Star Union Dai-ichi Life Insurance Company. The bank’s non-core investments include Central Depository Services (India), and ASREC (India), an asset reconstruction company.

Jet Airways

On the debt-laden airline, Mohapatra said: “We have already made our stand clear. We are supporting the (resolution) arrangement. Let us see the response from other stakeholders. Accordingly, we will take a call.” The BoI chief, who spoke on the sidelines of a FICCI-IBA Fintech summit, emphasised that the value of the asset must be protected. All stakeholders, including existing promoters, have to pitch in to revive the airline’s fortunes. Punjab National Bank (PNB) MD and CEO Sunil Mehta said any decision to provide emergency funds to Jet Airways will be taken collectively by the lenders and not on a standalone basis.

His observation comes in the backdrop of reports that the bank had approved ₹2,050-crore emergency funding to the airline. Meanwhile, Jet Airways, in a stock exchange notice, denied that it got ₹2,050 crore loan from PNB. Further, the company said it has existing credit facilities of $300 million from PNB and no fresh credit facilities, as reported, have been provided by PNB.

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Published on March 14, 2019
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