Asset quality under pressure as a Rs 100 crore export account turned NPA, says Karnataka Bank

“During this quarter, we have exited about Rs 4,500 crore of wealth advances. That is the reason why terminal to terminal our growth was at 7 percent. If you look at the average growth in the advances, it is more than 12 percent. We have started focusing more on the retail and the mid-corporate advances. In the retail sector up to Rs 5 crore, our growth rate has been 12.03 percent. Similarly, in the mid-corporate sector, this growth is 10.51 percent,” he added.

When asked about the bank’s overall exposure to the stressed accounts, he replied, “Watchlist especially categorised as special mention account-II (SMA) — we had Rs 543 crore during June 2019. It is at Rs 588 crore but here, two of the non-banking financial companies (NBFC) accounts which are under stress — DHFL and Religare — put together it is Rs 236 crore. So this Rs 588 crore is inclusive of these two accounts. Most probably chances of resolution of these accounts are very bright.”

In terms of recoveries from DHFL, he said, “They have already submitted a resolution plan which is being actively examined by the creditors. So there is no much haircut but some equity participation and all those things have not taken the final shape. Once that takes the final shape, we will be able to understand what will be right. However, I presume that there may not be a severe hit on account of this resolution of this particular group.”