TSL News Network
JAMMU, Jan 30: Jammu and Kashmir bank management today issued a clarification to the media reports regarding sale of NPAs to asset reconstruction companies’ at a discount to the book value of the NPAs in the Bank.
The Bank’s official spokesperson in a communiqué to the media said,” The asset sale has been done to fast track the realization of the cash for the bank within the regulatory framework after completing the due diligence including expression of interest in the newspapers under the Swiss Challenge Method which is the legally recognized mode of effecting recovery in stressed accounts (NPAs) and is normal practice in banking industry. Reserve Bank of India has framed guidelines governing the field and the bank has a Board approved policy for sale of stressed assets to ARCs. “
The communiqué added,” The Bank was precariously perched and prompt corrective action framework of the RBI would have been invoked restraining the bank from further lending and expansion of bank’s branches, had the timely and strategic decision would not have been taken by the Bank’s Board. The decision was foresighted as the resolution of these accounts is still not in sight even after referral to the NCLT framework for more than 18 months.
Majority of other lenders such as HDFC Bank Ltd, Axis Bank Ltd, ICICI Bank Ltd etc. too have already
sold their exposure in these NPAs under the similar process to the ARCs on more or less similar discounts against cash realization to bolster their balance sheets.” The bank’s official spokesperson further informed that the bank has already issued a clarification in this regard to the media and such campaign is a vain attempt by vested interest to create a negative perception to effect the bank’ reputation.
Bank he added reserves its right to initiate legal action against any person/ organization that may indulge in false propaganda to mislead the public and create a negative sentiment maligning the listed banking company of the state. Notably the State Bank of India (SBI) last week put on sale one such exposure in Essar Steel as last-minute litigations continue to delay the recovery of its loans to the steelmaker.