Made ample provisions towards the accounts referred by the RBI to NCLT: Axis Bank

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MUMBAI: India’s third largest private sector lender Axis BankBSE 3.48 % today clarified that it had made ample provisions towards the accounts referred by theReserve Bank of India to the National Company Law Tribunal (NCLT).

In a stock exchange filing the bank said that it has exposure towards 8 out of 12 accounts referred to the NCLT.

The bank’s fund based outstanding to these accounts was Rs 5071 crores while non-fund based outstanding was Rs 212 crore.

The bank also said that 80 percent of this outstanding was secured and it had provided Rs 2497 crore against these accounts.

In a sudden missive to banks last week the regulator demanded a steep increase in provisioning requirements for loans being referred to the bankruptcy courts.

RBI had also told banks to set aside at least 50% of the loan amount as likely losses for all cases referred to the insolvency process. The regulator also said that provisioning should be 100% in those cases that don’t get resolved and are forced into liquidation.

In a communication on June 15 the RBI had advised banks to initiate insolvency process against 12 accounts. The largest 12 accounts the RBI named are – Bhushan Steel (Rs 44,478 crore), Lanco Infra (Rs 44,365 crore), Essar Steel (Rs 37,284 crore), Bhushan Power (Rs 37248 crore), Alok Industries (Rs 22,075 crore), Amtek Auto (Rs 14,075 crore), Monnet Ispat (Rs 12,115 crore) Electrosteel Steels (Rs 10,274 crore), Era Infra (Rs 10,065 crore) Jypaee Infratech (Rs 9,635 crore), ABG Shipyard (Rs 6,953 crore) and Jyoti Structures (Rs 5,165 crore).

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