Page 6 - Banking Finance November 2022

BANK UPDATE

Officials said the new details shared standing of Rs 197.74 crore; Surat under which lenders will extend collat-
with India pertain to "hundreds of fi- Hazira NH6 Tollway Pvt Ltd of exposure eral-free loans up to Rs 10 crore to
nancial accounts", including many of Rs 335.54 crore and Shreebhav each eligible borrower.
cases of multiple accounts associated Polyweaves Pvt Ltd (Rs 20.20 crore).
Loans or debt facilities sanctioned to an
with some individuals, corporates and
In case of Sintex BAPL, SBI said only eligible startup on or after October 6
trusts.
ARCs are eligible in the e-auction as it can be covered under the scheme, the
They did not divulge specifics, citing the is a fraud account. The outstanding of Department for Promotion of Industry
confidentiality clause of the informa- Rs 197.74 crore against the company and Internal Trade (DPIIT) said in a
tion exchange and the adverse impact includes bank guarantee of Rs 6.10 notification. The loans will be backed
it may have on further investigations, crore. The company's business is manu- by sovereign guarantee. The move is
but asserted that the data would be facturing injection molded plastic com- aimed at supporting startups that are
used extensively in probes of suspected ponents for the automotive industry. hit hard by the pandemic and are now
tax evasion and other wrong doings going to be impacted further by the
including of money laundering and ter- rising interest rate scenario when li-
World currency reserves
ror funding. quidity is unlikely to be easily available
shrink by $1 trillion to new entrepreneurs.
In a statement, the Federal Tax Admin-
Global foreign-currency reserves are
istration (FTA) said that the exchange
falling at the fastest pace on record as
of information this year saw five new YES Bank now to buy
central banks from India to the Czech
additions to the list - Albania, Brunei
Republic intervene to support their stressed assets
Darussalam, Nigeria, Peru and Turkey.
currencies, according to a detailed YES Bank, which almost collapsed two
The count of financial accounts in-
Bloomberg report. Reserves have de- years ago from bad loans, is now on a
creased by nearly one lakh.
clined by about $1 trillion, or 7.8%, this hunt to buy stressed assets from other
While the exchange was reciprocal
year to $12 trillion. lenders.
with 74 countries, Switzerland received
Part of the slump is simply due to valu- A new partnership with US private-
information but did not provide any in
ation changes. As the dollar jumped to equity firm JC Flowers & Co. LLC allows
the case of 27 countries, including Rus-
two-decade highs against other reserve it to buy soured loans of other banks,
sia, either because those countries do
currencies, like the euro and yen, it Prashant Kumar, chief executive officer
not yet meet the international require-
reduced the dollar value of the hold- of the Mumbai-based lender, said in an
ments on confidentiality and data se-
ings of these currencies. interview.
curity or because they chose not to
receive data. But the dwindling reserves also reflect The so-called asset reconstruction
the stress in the currency market that company, that YES Bank will take a
SBI to sell Rs. 746 crore is forcing a growing number of central 19.99 per cent stake in, plans to hire
banks to dip into their war chests to as many as 100 people across legal,
NPAs in Oct-Nov compliance and investment manage-
fend off the depreciation.
The State Bank of India (SBI) has lined ment over the next few months, he
India's stockpile, for example, has
up various non-performing assets up for said.
tumbled $96 billion this year to $538
sale this month and the next, includ-
billion. "We are trying to create a credible
ing the fraud account of Sintex BAPL,
platform which has the capability and
to recover over Rs 746 crore. In an capacity to buy stressed assets from
Credit guarantee scheme
auction scheduled for November 4, SBI
other banks," Kumar said, pointing to
will put up NPAs for sale to asset re-
for startups notified; loans the bank's experience in managing this
construction companies (ARCs)/ finan- area of the business. YES Bank agreed
up to Rs. 10 crore collat-
cial institutions (FIs), banks or Non-Bank-
to sell Rs 48,000 crore ($5.9 billion) of
ing Financial Companies (NBFCs). eral-fee a bad loan portfolio last month to JC
The auction of NPAs will include ac- The government has notified a credit Flowers' ARC, a move Kumar said
counts of Sintex BAPL with an out- guarantee scheme for start-ups (CGSS) would help boost its profitability.
6 | 2022 | NOVEMBER | BANKING FINANCE