After President Ram Nath Kovind gave his nod for the Ordinance to amend the Insolvency and Bankruptcy Code (IBC), Rajnish Kumar, chairman State Bank of India, said the bank is prepared for a haircut.
"We don't mind a haircut, but we don't want to go bald," Rajnish Kumar said in a press conference called to launch the bank's comprehensive banking and lifestyle app called Yono, which is an abbreviation for you only need one.
At stake for SBI in the two NCLT lists prepared by Reserve Bank of India are gross non-performing assets of Rs 76,000 crore. In the first list, SBI had Rs 50,000 crore of loans, and in the second Rs 26,000 crore, both in various stages of arbitration in NCLT courts across the country.
He said that there is a lot of interest in the companies and their assets.
"If you look at the expression of interest that many of the companies under NCLT have got I must say that there is a good interest. And that good interest is being driven by outlook for that industry and quality of the asset. So you have to distinguish between the quality of the promoter and the quality of the assets which they have created." The enormous interest shown by potential bidders will not bring down the value of the assets, he said.
Nor will the long queue of potential bidders douse the creditor's resolve to check the credibility and the resolve of the new bidders to turn around the companies, Kumar told reporters. The credibility of those who are bidding would also be examined. Law makes it much more clear and explicit and that helps, he said, adding the valuations will be very transparent.
"We are aware that whatever lenders do, everything is under scrutiny. And the intent is to save the jobs and the assets of these companies," he said.
The existing promoters, he said, lost the business the day the company went into bankruptcy, and now there will be multiple parties involved in overseeing the resolution like the court, the CoC (committee of creditors) and the resolution professional.
He said, "Once the company has gone into insolvency, there is no promoter. They've lost that business the day it went into bankruptcy. The question is about who would be allowed to bid and who will not."
It is still not clear whether existing promoters who have run up huge NPAs would be allowed to big. In an earlier interaction, Kumar had said there is no ethical issue involved and that existing promoters can bid, but they would be put through rigorous audit.
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