Bhushan Steel: Yes Bank recovery at 66% thanks to Tata Steel buy

Yes Bank said it recovered 66% of its total claim of Rs 325 cr from bankrupt steelmaker Bhushan Steel after it was taken over by Tata Steel.

“With this recovery, the Bank now has an exposure to only one account, aggregating to only Rs 23.4 Crores (with 50% provision) as on March 31, 2018, from borrowers referenced in the List 1 of the RBI IBC NCLT Process,” it said.

The list refers to the tally of loan defaulters forwarded by the RBI for quick action to banks in India.

The first list had 12 accounts, which comprised 25% the total bad loans in the country, and the second list had 28 accounts with another 40% of the NPAs of Indian banks.

The Reserve Bank is exerting pressure on banks to prevent rolling over of bad loans forever and for the banks to get rid of these loans from the balance-sheets by either writing them off or taking stronger measures to recover the amount.

Yes Bank had two such accounts, including Bhushan Steel. In all Bhushan Steel owed about Rs 42,350 cr to various banks in India, led by Punjab National Bank, making it the biggest case of default.

Yes Bank said it was able to generate about Rs 32 cr by selling pledged shares of Bhushan Steel, and another Rs 184 cr was recovered from the nearly Rs 35,000 cr made by Tata Steel for acquiring the steelmaker.

Yes Bank had written off much of the loan, and the enhanced recovery will now mean that Rs 36 cr of the write-off can now be written back to the bank’s balance sheet.