March 12, 2018
Coimbatore : Nationalised Bank of India (BoI) has recovered Rs.7,000 crore worth Standby Letter of Credit (SBLC) issued by other banks in the last two months and the balance of Rs.2,000 crore would be recovered in another two months, a top Bank official said today.
This recovery will substantially improve the Bank’s balance sheet, BoI Executive Director, N Damodharan told reporters here.
SBLC is a financial commitment If the company that took the loan originally doesn’t service it properly, BoI can invoke the SBLC and other banks have to make payment to the branch.
Stating that the bank has embarked on a plan, following restrictions from RBI on it under the Prompt Corrective Action (PCA) framework, Dhamodaran said that the bank is aiming to bring down its net NPA ratio substantially, to below six per cent.
Asked about credit growth, he said that it has grown 22 per cent in the first nine months of 2017-18.
Stating that the bank has not tightened its norms for providing loans to MSMEs in the wake of the recent frauds in the banking sector, Damodharan said about 85 per cent of the accounts have been linked with Aadhaar.
Damodharan also said that the Bank has not not been impacted by the developments in South Africa, where the Government-owned Bank of Baroda was facing losses on loans given to Gupta family companies, which have filed for bankruptcy.
To a specific question on the recent incidents of massive frauds in the banks he said “There are multiple checks and balances. We have a robust audit system in place.”