Money & Banking
NPAsource.com sees e-auctions worth Rs600 crore for bank NPAs in FY14

NPAsource.com has conducted 200 deals worth Rs100 crore so far and sees e-auctions of NPAs worth Rs600 crore in FY14

NPAsource.com, which focuses on resolution of stressed assets, said it expects to undertake e-auctions of various banks’ non-performing-assets (NPAs) worth about Rs600 crore during 2013-14. It would undertake e-auction of NPAs for Dena Bank, IDBI Bank, SIDBI, Bank of Baroda, Indian Overseas Bank, Indian Bank, State Bank of Hyderabad, Bank of Maharashtra as well as Kotak Mahindra Bank.

 

“We already have a platform for all stakeholders for resolution of NPAs and so the e-auction route is a natural growth ladder for us. Besides, despite NPAs being critical issue for banks, and e-auction of NPAs just at its infancy stage, there is a lot of scope for the company to grow in this area. Today, even tractors are being sold through the e-auction route by banks,” said DK Jain, chairman and managing director of Atishya group, which owns NPAsource.com.

 

The portal believes that the growth in e-auctions is likely to be strong as bad assets of banks have grown significantly. Gross NPA of public sector banks rose to Rs1.76 lakh crore as on June 2013 from Rs1.55 lakh crore as on March 2013.

 

Earlier this year, Ministry of Finance (MoF) made it mandatory for all commercial banks to move from physical auctions to e-auction mode for all cases of NPAs under the Debt Recovery Tribunal (DRT). NPAsource.com said till date it had already conducted over 200 deals worth more than Rs100 crore and expect residential, agricultural, commercial and industrial properties to be sold through the e-auction route.

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COMMENTS

yprao

4 years ago

Congratulations to the NPAsource.com team.

R Balakrishnan

4 years ago

Good stuff. But only the real small borrower gets in to the loop. The big crooks, should also be publicly auctioned. Sell control of their cos in return for debt. And do it publicly, open auction to foreigners and funds. Snatch away a few cos from shady promoters and then watch the attitude change.

India’s external debt stock stood at US$390 billion at end-March 2013
The rise in external debt of 12.9% is mainly due to increase in short-term debt, commercial borrowings and non-resident Indian deposits, says a status report from the Finance Ministry
 
The level of India’s external debt (at US$390 billion) is on a rising trend with the elevated level of current account deficit and hence overall external financing requirements. With rising debt flows, deceleration in GDP  growth  and  depreciating  rupee,  key  external  debt  indicators  witnessed  some  deterioration as  at  end-March  2013  as  compared  to  end-March  2012. This is according to a status report on India’s external debt published by the department of Economic Affairs, Ministry of Finance.
 
However,  debt  service  ratio,  measured by the proportion of total debt service payments to current receipts (minus official transfers) of balance  of  payments,  at  end-March  2013  showed  some  improvement  over  end-March  2012, coming down from 6.0 to 5.9 and India’s external debt has remained within manageable limits as indicated by  external  debt-GDP  ratio  of  21.2%  during  2012-13, the report added.
 
India’s external debt position in recent years is given below:
 
 
At end-March 2013, India’s external debt stock stood at US$390.0 billion, increasing by 12.9% over the end-March 2012 level of US$ 345.5 billion. The rise is mainly due to increase in short-term debt, commercial borrowings and non-resident Indian deposits, the status report stated.
 
The  share  of  commercial  borrowings  in  total  external  debt  stock  stood  at  31.0%  at  end-March  2013,  followed  by  short-term  debt  (24.8%),  NRI  deposits  (18.2%)  and multilateral debt (13.2%). Government  (sovereign)  external  debt  stood  at  US$  81.7  billion  at  end-March  2013  vis-à-vis US$ 81.9 billion at end-March 2012.  The share of government external debt in total external debt was lower at 20.9% at end-March 2013 as compared to 23.7% at end-March 2012.
 
The International Debt Statistics 2013 of the World Bank, which contains external debt numbers for 2011,  shows  that  India’s position was  fourth,  in  terms  of  absolute  debt  stock  amongst  the  top twenty  developing  debtor  countries, the report concluded.

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No sustainable turnaround in BoP for 6 months
Weak growth and poor flows, both equity and overseas borrowing by corporates, will keep up the pressure on balance of payments
 
India’s trade deficit narrowed to US$10.9bn in August (Nomura: US$8.5bn) from US$12.3bn in July due to strong exports. Exports rose 13% y-o-y (year-on-year) in August, following 11.6% growth in July, led by improving global demand. Even as global demand improved, weak domestic demand and the clampdown on gold imports kept imports under check, contracting by 0.7% y-o-y in August compared with a decline of 6.2% in July. Within imports, gold imports moderated sharply to US$0.65bn from US$2.2bn in July; non-oil imports contracted 10.4% y-o-y versus a decline of 5.3% in July; while oil imports rose sharply to 17.9% y-o-y from - 8%. Hence, higher oil imports (due to high oil prices) largely offset the benefit of lower gold imports and slowing domestic demand.
 
Even as the macro backdrop appears to be stabilizing, it is not expected that there will be a sustainable turnaround in trade deficit and balance of payments. Continuing concerns over the growth outlook, rising credit risks, deteriorating bank asset quality and worsening fiscal pressures suggest that risks remain skewed to the downside over the next six months. This is according to a research note by Nomura Financial Advisory.
 
According to Craig Chan, Nomura’s head of Asian FX strategy, the recent measures announced (on FCNR(B) deposits and the dollar swap window for oil companies) provide a near-term respite. But Nomura remains cautious on a sustained rally in the Indian rupee because of the continued negative fundamentals, mainly from weak growth.
 
Nomura’s research note adds that it would expect weak growth to result in a slowdown in growth-sensitive flows, both equity and overseas borrowing by corporates, which can offset inflows through other routes. Hence, it expects the balance-of-payment pressure to persist.

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