Srinagar, Oct 27: Jammu and Kashmir Bank will put up for sale non-performing assets to the tune of Rs 960 crore, as part of its efforts to improve its balance sheet, sources in the bank said.
The bank is hoping that the process of sale of these non-performing assets to the National Asset Reconstruction Company Limited (NARCL) will be completed by the end of this month, the sources said. Of the six accounts, the JK Bank has an exposure of Rs 230 crore in the now-bankrupt Reliance Naval and Engineering Limited, Rs 188 crore in Jaypee Infratech, Rs 176 crore in Jaiprakash Associates Limited and Rs 126 crore in Coastal Energen Private Limited.
Jammu and Kashmir Bank’s Rs 960 crore NPAs are part of the Rs 9,234 crore bad assets of the Public Sector Undertaking (PSU) lenders that the NARCL has offered to buy at Rs 3,570 crore in the first phase. The proceeds from the sale of the NPAs, which the NARCL is doing on 15-85 basis over a period of five years, will aid Jammu and Kashmir bank’s plans to raise capital for its foray into markets beyond the union territory of Ladakh and Jammu and Kashmir.
The bank has set a goal of raising Rs 2,000 crore capital by the end of the current fiscal to fuel its expansion plans. The bank has started 27 new business initiatives over the past five months while making gold loans available at 152 of its branches. It has also opened cluster offices in Mohali, Lucknow and Bengaluru.
The bank declared Q2 results earlier this week, which showed an increase of net profits to Rs 243 crore, up by 119 per cent on a year-on-year basis. The good performance of the bank has also been reflected in the price of its shares on the stock exchange. The JK Bank share has witnessed an appreciation of 33 per cent in its value over the past 30 days.