SRINAGAR The J&K bank on Wednesday said the sale of assets has been done by it to fast track the realization of the cash for the bank within the regulatory framework.
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, said a spokesman of the bank in a statement issued here in 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 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 banks branches, had the timely and strategic decision would not have been taken by the Banks Board. The decision was foresighted as the resolution of these accounts is till 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 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, it said.
The Bank reserves its right to initiate legal action against any person/ organization that may indulge in false propaganda to mislead the general 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.
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