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State Bank of India (SBI) has set up a marketing team under its SARG (Stressed Assets Resolution Group) vertical to reach out to a broader investor base and showcase its stressed assets undergoing resolution under/ outside the Insolvency and Bankruptcy Code.
In this regard, India’s largest bank, in its annual report, noted that resolution under IBC is a market-oriented mechanism where a higher number of bidders for a particular stressed corporate debtor result in better valuation and maximisation of recovery for lenders.
The transfer of eligible assets to NARCL (National Asset Reconstruction Company Ltd) is also being monitored at SARG with requisite enablers already implemented to ensure the smooth migration of identified assets, as per the report.
Around 22 accounts with aggregate exposure of approximately ₹17,000 crore are proposed to be transferred to NARCL in phases, it added.
“Today, SARG stands as one of the most important verticals of your bank, and the GNPA (gross non-performing assets) of your bank is on a course of a downward journey,” the Bank’s annual report. said
Latent income generating avenues
Resolution of stressed assets by SARG presents latent income generating avenues such as cash recovery in NPAs and AUCA (advances under collection account), reduction in loan loss provisions and unlocking the capital for credit extension.
SBI’s GNPAs came down to 3.97 per cent of gross advances as at March-end 2022 against 4.98 per cent as at March-end 2021.
A total of 994 cases (whole Bank) were referred to the National Company Law Tribunal (NCLT) on March 31, 2022, out of which 773 cases have been admitted, the report said.
Furthermore, 152 cases have been resolved, including some high-value accounts from RBI’s first and second reference lists.
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