‘Not enough demand for RBI plan: Rao
Punjab National Bank (PNB) on Tuesday lowered the debt recast target by 50% to ₹20,000 crore as there was not enough demand for restructuring approved by RBI a couple of months ago.
The Reserve Bank of India (RBI) has permitted one-time restructuring of corporate and personal loans to help entities amid the COVID-19 crisis.
“With respect to restructuring, surprisingly, as on today, if you look at [it], not many people have [made] requests. In terms of retail and MSME together, by September 30, we have undertaken restructuring to the extent of ₹41 crore. As on today, another ₹30 crore request has come with respect to retail and MSMEs.
“But MSMEs, we are expecting restructuring to happen to the extent of anything around ₹4,000-₹5,000 crore before December 31,” PNB MD S.S. Mallikarjuna Rao said in a virtual interaction with the media.
As far as corporates were concerned, he said, the bank has received applications from 15 applicants amounting to ₹2,022 crore.
It is very important to note, he said, that if the restructuring was undertaken for corporate accounts, their ratings would be under pressure for two years.
“That could be one of the reasons why the response has not been very high.
“However, when we look at the way the response is coming to us, it may not be even ₹20,000 crore by December 31,” he said. This would be less than 3% of the total advances, he added.
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