Recovery of Banks' Stressed Assets Gathers Pace - Chart Of The Day 15 June 2018 - Equitymaster

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Recovery of Banks' Stressed Assets Gathers Pace
Jun 15, 2018

The recent bids received for the top defaulters under the RBI's resolution plan has been a mixed bag.

Bhushan Steel, the top defaulter in terms of the borrowed amount has received a bid at a 37% discount. This seems reasonable compared to other defaulters.

Alok Industries, received a bid of just Rs 48 billion against an outstanding amount of Rs 295 billion. The bid was submitted by Reliance Industries - JM Financial ARC.

The committee reviewing the Insolvency and Bankruptcy code (IBC) has made amendments to speed up the resolution process. A key suggested change is to reduce the share of votes needed for approval from 75% to 66%.

The Reliance - JM bid was rejected earlier since it received a 71% approval from the creditors. These kind of bids will pass through post the amendment. While this is good news for the resolution process, banks might have to forego a significant amount of their lending amount.

This Chart Of The Day was published in The 5 Minute WrapUp - If You're Thinking of Buying a 'Cheap' PSU Bank Stock... I Have a Better Idea

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