SBI puts on block three loans worth Rs. 20,769 cr

SBI has invited expression of interest (EoI) from interested investors to acquire 51 per cent stake and management control of these three companies, says the financial newspaper 

In the last fortnight, State Bank of India (SBI), on behalf of itself and other consortium lenders, has put three large loans aggregating to INR 20,769 crore on the block, reports a business daily.

SBI has invited expression of interest (EoI) from interested investors to acquire 51 per cent stake and management control of these three companies, says the financial newspaper.

The companies are: a public listed EPC company (banks’ loan exposure: INR 6,897 crore); a company operating a 540 MW coal-based power project in Jharkhand (INR 2,465 crore); and a public listed 2.51 MTPA integrated steel plant in Jharkhand (INR 11,407 crore).

The move comes in the backdrop of the RBI setting a March 2017 deadline for the clean-up of bad loans in the country's banking system, reports the paper.

Credit rating agency CRISIL recently cautioned that the asset quality problems being faced by public sector banks (PSBs) will continue through most of FY17. 

The resultant impact on profitability and capitalisation of the PSBs can further dent their credit profiles over the medium term, says CRISIL.

Significant stress in the corporate loan book of PSBs is expected to result in their weak assets jumping to INR 7.1 lakh crore by March 31, 2017 (11.3 per cent of total loan book) from ~INR 4 lakh crore as on March 31, 2015 (7.2 per cent of loan book), according to CRISIL.