SBI, Brookfield set up JV, Rs 7,000cr fund for bad loans
by : Nationaltenders
Posted on - July 21, 2016 11:08:50AM
Region : National
A statement issued by SBI on Wednesday said that the country's largest bank has committed up to 5% of total investments into stressed assets. "The JV will independently evaluate and invest in various stressed assets, and will rely on Brookfield's operational expertise to manage recapitalized businesses," a joint statement said. The JV with Canada's largest alternative asset manager, at a later stage, will seek participation from other lenders.
At present, banks are dealing with bad loans by either creating an in-house division to deal with defaulters or by selling loans to asset reconstruction companies (ARCs).
ARCs have been issuing security receipts to banks in lieu of loans they purchase since they do not have funds. By creating an asset management company, SBI has addressed several issues. The AMC will lead investors into the fund and it will also bring in partners with skills to turn around troubled businesses.
SBI chairman Arundhati Bhattacharya hoped the collaboration with global players will enable banks to find an alternate solution to the stressed asset issue. According to her, this approach will be more acceptable to both lenders and borrowers in cases where promoters are unable to infuse funds and lenders are reluctant to take additional exposure.
Brookfield India head Anuj Ranjan said, "This is a great opportunity for us to continue to invest in the long-term India story, and we're pleased to be expanding our private equity platform here." Bulk of Brookfield's global assets are in property followed by power and infrastructure sector.
SBI's gross bad loans touched Rs 72,792 crore, or 5.1% of their total loans. After making provisions of Rs 7,949 crore, its net non-performing assets fell to 2.8%. The provision coverage ratio - the cushion that banks keep to protect against bad loans - is 65.2%
The bad loans are deadweight on the books of banks and they prevent them from growing their loans. One of the traditional methods used by banks to clear bad loans has been to create a "bad bank" - a fund which will acquire all the bad loans and free up the original lender.
The government has been thinking of setting up a stressed asset fund in association with banks that could provide equity or debt capital to stressed companies. The RBI has however opposed majority ownership by banks in any stressed asset funds. The Indian Banks Association had in May mooted a proposal and sought RBI's view on a bank-sponsored stressed asset fund.
Ref.: http://timesofindia.indiatimes.com/business/india-business/SBI-Brookfield-set-up-JV-Rs-7000cr-fund-for-bad-loans/articleshow/53311759.cms
Leave your comment
Please login to leave your comment.National Tenders
We Provide Tender Services,Private work,Post Your Requirement,Event Posting,Liasisoning,Web Designing,Digital Signature Certificate
Enquiry Now
Our Events
Rate Contract For M.S. Fabrication Work (With Material) In All Sub Divisions Under Jurisdiction Of City Division- Ii (South) Phed Jaipur . for more details Call on 079-66172085 / 86
Bengaluru, September 16, 2016: The Asia-Pacific Aerospace Quality Group (APAQG) has conferred its prestigious membership on HAL under the category 'Full Member with voting rights' making India as the seventh nation to join the APAQG under International Aerospace Quality Group (IAQG). The other nations of APAQG are China, South Korea, Taiwan, Indonesia, Singapore and Japan. “[..]
Supply Of Materials For Construction Of Road By Cement Concrete Work With Earth Work And Side Filling By Bats Moorum And Fine Sand And Piling From Bablu Maity House To Bimal Ghorai House At Paramanandapur Under Paramanandapur Gp From The Fund Of . for more details call on 079-66172085 / 86
Hiring Work Tenders in Gujarat :- Hiring Of Diesel Driven A/C Closed Body Jeep On Arc Basis For 12Hrs/Day For 02 Years For 3000 Kms/Month For D.E. (Civil), Tr. Circle Office, Jambuva, Under Jambuva Tr Circle.” . Click for Documents :- http://www.nationaltenders.com/details?id=NzQyMDI4NA== Call on :- 079-66172085/86
Similar Events
Download Tender Documents Furniture Work:- Providing Internal Furniture Work For Grampanchayat Office At Navnagapur , Taluka. Nagar, Dist - Ahmednagar. . Link For Open Documents :- http://www.nationaltenders.com/details?id=NzM0Njk4OA== For more details or sample tenders Contact us 079-66172085/86 support@nationaltenders.com
NTID 7422634 Tendering Description Supply, Testing And Commissioning Of Pressure Calibrator Used Forcalibration Of Pressure Gauges, Sensors And Switches. As Per Specification Attached. Estimated Cost 0.00 EMD 0.00 Doc Cost 0.00 Last Date for Submission 2016-08-18 Closing Date 2016-08-18 Location India, Maharashtra, Nagpur Ten[..]
We started in the year 1997 with humble beginnings as Kumar Computers and today known as Shri Nanak Global Solutions, the leading business solution providers of Tally.