Less than 3 per cent of loans may go for Covid recast

NEW DELHI:  Punjab National Bank (PNB) has halved its estimation of accounts that may go for one-time loan restructuring, approved by the Reserve Bank in August for dealing with Covid 19-related stress, to Rs 20,000 crore owing to lacklustre response to the scheme. 

The lender now expects less than three per cent of its loan book to be under the debt recast window. “In August, we had estimated it (restructuring) to be Rs 40,000 crore. Surprisingly, however, not many people have requested for loan restructuring. People have started paying the money,” PNB Managing Director S S Mallikarjuna Rao said in a virtual interaction with the media on Tuesday. 

“In the retail and MSME segment, we have undertaken restructuring to the extent of Rs 41 crore till September. Then, we have also received an application for another Rs 32 crore, which we have restructured by October 31. In terms of corporate loans, we have 15 received applications amounting Rs 2,022 crore,” he added. Of the total advances set to go for restructuring by December 2020, Rao expects the MSME profile restructuring to be around Rs 4,000-5,000 crore. 

The country’s second largest public sector bank also plans to raise Rs 7,000 crore through qualified institutional placement (QIP) of shares by December next month. PNB has already taken approval from the board for raising Rs 14,000 crore by way of Tier II, Additional Tier 1 (AT-1) bonds and QIP (Qualified Institutional Placement), according to the PNB chief.