homefinance NewsWon't require any more provisioning on account of Bhushan Power fraud, says Allahabad Bank
Won't require any more provisioning on account of Bhushan Power fraud, says Allahabad Bank
Allahabad Bank shares tumbled 10 percent on Monday on news report that the bank had to classify about Rs 1,700 crore of loans given to Bhushan Power and Steel as fraudulent. SS Mallikarjuna Rao, MD and CEO of Allahabad Bank, spoke to CNBC-TV18 about the development.
Allahabad Bank shares tumbled 10 percent on Monday on news report that the bank had to classify about Rs 1,700 crore of loans given to Bhushan Power and Steel as fraudulent. SS Mallikarjuna Rao, MD and CEO of Allahabad Bank, spoke to CNBC-TV18 about the development.
"All loans have already been classified as non-performing assets (NPAs). End of March, we have provided Rs 900 crore because of the resolution process is already in place. Considering the amount of recovery, we have made the provision of the residual amount. However by June since it has not taken the shape of the resolution, we have done the 100 percent provision,” Rao said on Monday.
“No more provision is required for this issue,” he added.
On gross NPAs, Rao said, “The major problem that we are facing is the non-settlement of the national company law tribunal (NCLT) cases as a result of which higher amounts are not coming for recovery. While that is an area of concern, the concern on balance sheet is not there because we have already provided to the extent of 90 percent. So we expect the gross NPAs to go down after Q2 onwards.”
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