The Bank of India (BoI) on Tuesday sold non-performing assets worth 10,710 million rupees, including its exposure to eight energy projects and five accounts on one or other of the Reserve Bank of India (RBI). High-profile exhibits include GMR Chhattisgarh Energy (Rs 562), Lanco Babandh Power (Rs 529.45), GTL (Rs 47 Crore), Millennium City Expressways (Rs 35 Crore) and Lavasa Corporation (ROS Crore).
The other energy sector accounts on the block are GVK Power, Goindwal Sahib (156 Rs crore), Jyoti Power Corporation (198 crore), Kohinoor Power (70 Rs crore), Korba West Power (crore) Rs 240), Meenakshi Energy (Rs 68 crore), Vandana Vidhyut (Rs 224 crore) and Visa Power (Rs 146 crore). BoI is also seeking buyers for its Amtek Auto exhibit, listed on RBI's first list and bought by Liberty House as part of the default resolution process, for 141 crores. Orchid Chemicals and Pharmaceuticals, Jai Balaji Industries, Visa Steel and Wind World (India) of the second list are also for sale. This is BoI's second attempt in as many months to sell its exposures to these last four companies.
"The above NPAs are offered for sale on a 100% cash basis and on an" as is "basis without recourse," said BoI in a sales document.
Last month, BoI put on sale its exhibitions on Essar Steel, Bhushan Power and Steel and Alok Industries, as well as 38 other NPAs representing a total of 8,831 crore. The three accounts, which are part of the RBI's first list of large NPAs, have remained unresolved for a year because the list was published after several rounds of litigation.
Bankers claim that lenders sell their exposures to insolvent companies over long periods of time so as not to increase their provisioning burden. "APN's bilateral sales occur because in some banks, the total impact of provisions on these accounts has not been taken into account. Perhaps they are getting closer to the point where it's better to sell the account than to put more money aside for that account, "said a senior executive at a medium-sized public sector bank.
The BoI is part of the RBI's rapid corrective measures, which impose severe restrictions on the bank's ability to grow and consume capital.