It is like scrapping the bottom of the barrel for the country’s largest bank, the State Bank of India (SBI), when it comes to liquidation of defaulting companies under the five-year-old Insolvency and Bankruptcy Code (IBC).
The state-owned bank has managed to get a paltry 5 per cent of the outstanding loan amount. Sources suggest the book value of the loan outstanding in such liquidation cases was close to Rs 40,000 crore since the inception of the IBC.
While the SBI’s loans locked in liquidation cases may not be big in terms of the bank’s gross advances of over Rs 25 lakh crore, the low realisation raises the issue of credit underwriting process, monitoring of public funds, and the value of the collateral.
The low realisation tre…
Read the full article at: https://www.businesstoday.in/industry/banks/story/sbi-recovers-paltry-5-of-bad-debt-under-lbcs-liquidation-process-304371-2021-08-17