Andhra Bank launches OTS camp to bring down APNs

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Andhra Bank (AB) has launched a unique settlement camp to bring down low-value non-performing assets (NPAs). The bank decided to waive 55% to 30% of the default amount for NPAs. The waiver will depend on the age of the NPAs.

Talk to The Hindu Ajay Gupta, chief executive of Andhra Bank Circle (CGM), said the bank had worked out some formulas for the settlement. The borrower will have to pay 70 percent of the accounts up to Rs. 10 lakh. These accounts should have been reported as NPA from April 1, 2013 to March 31, 2014. Similarly, 60 percent of the amount in default would be recovered if the NPA was between April 1, 2011 and March 31, 2013; 50 percent of the defaulted amount would have to be paid by the borrower if the APM was on April 1, 2009 and March 31, 2011. The borrower must pay 45 percent of the defaulted amount if the APM was on or before March December 31, 2009, he said.

Mr. Gupta said substandard accounts and accounts eligible for the debt cancellation scheme were not eligible for OTS. Accounts involving cases of fraud would only be examined after obtaining administrative authorizations from the Vigilance Service. The borrower with multiple accounts or credit facilities under the same title was also eligible if the total outstanding amount of the actual account was not more than Rs. 10 lakh, he said.

The gross NPAs of Vijayawada Circle of Andhra Bank as of March 31, 2015 represented 5.38% of the gross advances. The bank intends to bring it down to 4 percent through collection and compromise settlements. The bank would implement SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Collateral Act 2002) if borrowers did not respond to the OTS program and settle accounts, he said. .


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