Chennai: The six-month deadline set by RBI to finalise resolution plans for around 70 large stressed accounts worth over Rs 3.8 lakh crore ends today with banks making a last mile dash to avoid bankruptcy proceedings against these defaulters who are mostly in the power and highways sectors.
The RBI circular issued on 1 March asks banks to identify projects with even a day’s default as stressed assets, and conclude resolution proceedings in 180 days.
If no resolution is reached by today, these accounts, which also include some telecom companies, will have to be referred to NCLT to initiate bankruptcy proceedings, the RBI had said.
Banks are trying to come up with resolution plans for these accounts as going to NCLT will mean large haircuts. In some of the stressed accounts, some lenders have already finalised resolution plans, bankers said.
It can be noted that almost three-fourths of these Rs 3.8 lakh crore-worth stressed assets are power companies which had dragged the central bank to the Allahabad High Court where the matter is still pending.
That the matter is sub-judice also gives bankers some confidence that they may get some more time to resolve them out-of-court.
SBI managing director Arijit Basu said that about 7-8 power sector projects worth Rs 17,000 crore are expected to be resolved soon as lenders are nearing consensus on these.
“There are about 34 stressed power projects and the combined value of their outstanding loans is about Rs 1.74 lakh crore. We have looked at 13-14 accounts which would entail changes in management, investment etc. Out of these, 7-8 accounts we are looking at very closely to get some consensus among the banks,” Basu said.
“A few banks have already sanctioned resolution plans for some cases and others are in the process of doing so,” said an executive director of a state-run bank.
NBFCs up hiring and lending
The ability of NBFCs to tap ‘unbanked’ customer base at a time when the banks are facing headwinds in coming out of the NPA mess is driving the growth in the sector.
Experts see increased hiring in tier-II cities for roles in sales, collection underwriting and risk.
Hiring activity in the non-banking financial companies (NBFC) sector is likely to expand by up to 35-40 per cent in the next 12 months driven by rising innovation and growth, according to industry experts.
TeamLease head, recruitment services, Ajay Shah said that as banks are struggling to come out of the non-performing assets (NPAs), NBFCs are in a sweet spot of growing consumer demand.
Shah said, “Rising innovation and growth in the sector has resulted in new business models like Peer to Peer (P2P) lending platforms. The sector is expected to witness 35-40 per cent growth in hiring in one year.”
The has created a high demand for customer service, operations and credit and collection, where the focus is on getting quality people, he said.
Other key segments in focus would be information security and cybersecurity, he added. Echoing the view, specialist staffing company Xpheno co-founder Kamal Karanth said NBFCs will create around 2.50-3 lakh jobs approximately.
Michael Page India Associate Director Nitin John Abraham said while the hiring in NBFCs in MSME financing has doubled to almost 18 per cent of the total book, the growth in the wholesale financing space is expected to largely remain constant in the 18-20 per cent range.
He said with the number of new players coming up, there has been a significant spurt in demand for top-level executives (CEOs and business heads) to build organisations.
GlobalHunt managing director Sunil Goel said growth is not only happening in large metros but also in tier II cities as a larger portion of SME’s and buyers do exist in these cities and companies are finding a huge business potential.
Most of the hiring happens at the mid-senior level wherein sales and customer-centric positions are large in numbers along with Credit and risk management and documentation roles, he added.