Allahabad Bank looks at Rs 5,500 cr recovery in FY19
Kolkata, June 27 : State-run lender Allahabad Bank is looking at a recovery of around Rs 5,500 crore in the current fiscal, an official said on Wednesday.
The bank has submitted a roadmap to the Centre and if everything goes "well and smooth" as per its projections, it was likely to come out of prompt corrective action (PCA), imposed by the Reserve Bank of India (RBI), by March 2020, the official said.
"We are expecting Rs 3,000 crore recovery through resolution in NCLT (National Company Law Tribunal) in the entire financial year, another Rs 2,000 crore through normal recovery process and Rs 400-500 crore through asset sales," Allahabad Bank Executive Director N.K. Sahoo said.
"We have recently recovered around Rs 1,300 crore from the resolution of Bhusan Steel and Electrosteel Steels," he added.
The bank has an outstanding exposure of Rs 4,000 crore in several accounts referred to NCLT including Uttam Galva, Alok Industries, Essar Steel, he said, adding that it was hopeful of recovering from these accounts in the current fiscal.
The bank may have to take a hair-cut upto 50-60 per cent in these accounts, he added.
"We have created a NCLT cell to effectively monitor the NCLT accounts. We have almost 94 (stressed) accounts referred by us as well as by other lenders amounting around Rs 12,000 crore.
"Almost 45 per cent of our gross NPA is in the NCLT," Sahoo told shareholders here at the 16th Annual General Meeting of the Allahabad Bank.
Capital requirement for the lender during the current fiscal would be close to Rs 9,000 crore, Sahoo said on the sidelines of the meeting.
"The bank would require close to Rs 9,000 crore worth capital this fiscal," he said.
Of the total capital requirement, the bank requested the government to pump in Rs 7,000 crore and was looking to raise close to Rs 1,900 crore through different modes this fiscal.
This apart, it is hopeful of raising close to Rs 500 crore from sale of non-core assets.
"A roadmap has been submitted to the (Finance) Ministry. If everything goes well as per the bank's projection, we are expecting to come out of PCA by March 2020," he said.
At the end of the 2017-18, gross NPA (non performing assets) of the bank stood at Rs 26,562.76 crore as compared to Rs 20,687.83 crore in FY 17 (2016-17) and Net NPA remained at Rs 12,229.13 crore as on March 31, 2018 as against Rs 13,433.51 crore in FY 17.
Owing to high non-performing assets (NPA) and negative return on assets (RoA) for two consecutive years, the bank was brought under prompt corrective action framework by the RBI on January 2, Sahoo told shareholders.
In fact, subsequently, the RBI had imposed additional restrictions on Allahabad Bank under prompt corrective action (PCA) framework.
It was asked to restrict expansion of risk-weighted assets (RWA), reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits.
The bank had posted a net loss of Rs 3,509.63 crore in the March quarter of 2017-18.
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IndiGo crisis enters day 7; 127 flights cancelled from Bengaluru
Mumbai (PTI): Flight disruptions at IndiGo entered the seventh day as the crisis-hit carrier cancelled 127 flights from Bengaluru Airport on Monday, a source said.
In another development, aviation safety regulator DGCA in an order on Sunday late evening extended the time by Monday 6 pm for IndiGo CEO Pieter Elbers and Chief Operating Officer and Accountable Manager Isidro Porqueras to submit reply to its show cause notice over the ongoing disruptions in the airline’s operations.
In the notices issued to Elbers and Porqueras on Saturday, the regulator said the large-scale operational failures pointed to significant lapses in planning, oversight, and resource management, and asked them to submit their replies within 24 hours.
IndiGo has cancelled 127 flights, including 65 arrivals and 62 departures from Bengaluru Airport, the source said.
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The Gurugram-based airline, partially-owned by Rahul Bhatia, has been facing heat from both the government and the passengers for cancelling hundreds of flights since December 2, citing regulatory changes in the pilots' new flight duty and regulations norms, which resulted in lakhs of passengers getting stuck at airports pan-India.
For the first three days the airline failed to acknowledge the huge number of cancellations and it was only Friday when it cancelled 1,600 flights (Friday), a record in Indian aviation history that CEO Elbers released a video apologising for the major inconvenience caused to passengers due to the disruptions.
In the message, he admitted that the airline was cancelling a large number of flights, but did not mention that it would cancel 1,600 flights on that particular day.
The new norms, applicable for all domestic carriers, have come into force in two phases - July 1 and November 1 this year.
IndiGo has already temporarily secured major relaxations in the second phase norms till February 10.
The latest FDTL norms, which entail increased weekly rest periods to 48 hours, extended night hours, and limiting the number of night landings to only two, as against six earlier, were initially opposed by domestic airlines, including IndiGo and Tata Group-owned Air India.
But they were subsequently rolled out by the DGCA following the Delhi High Court's directives, albeit with a delay of over one year, in a phased manner, and with certain variations for airlines like IndiGo and Air India.
The norms were originally to be put in place from March 2024, but airlines, including IndiGo, sought a step-by-step implementation, citing additional crew requirements.
