Exposure Of Rs. 4,130 Crore In Firms Impacted By Coal Order: SBI | SupportBiz


Exposure Of Rs. 4,130 Crore In Firms Impacted By Coal Order: SBI

This statement came in the light a senior advocate appearing on behalf of Coal producers' Association submitting to the Supreme Court that the SBI may suffer a loss of up to Rs. 78,263 crore which is almost 7.9% of its net worth for financial year 2013. Refuting this, SBI said that the above figures have not been furnished by the bank.

New Delhi: State Bank of India said on Thursday that it has exposure of over Rs. 4,100 crore to companies that will be impacted by the recent Supreme Court order quashing 214 coal blocks.

SBI chairperson Arundhati Bhattacharya, however, added that loans extended to the power plants would not become NPAs (non-performing assets) as the government had indicated that it would make some arrangement to provide coal linkage despite cancellation of mines.

"These are units where power units are getting set up. They were supposed to mine the coal thereafter use it for generation of power instead of that they will have to get coal from somewhere else," she said.

"These companies have exposure around Rs. 4,130 crore. There is nothing to be unduly worried about it. The (Coal) Ministry has indicated that they will make some arrangement for giving linkages from elsewhere and also thereafter they will go for rebidding or re-auction for mines," she said.

The SBI chief, however, said that it would impact the margin of power plants. So, to that extent whatever is the margin that will determine what will be the status of that account, she said.

Emphasising that cancellation of 122 telecom licences in 2012 did not lead to a huge amount of NPA, she said that in this case also, there will be takers and chances of assets turning bad is minimal.

Talking about stock spilt, she said that it is to ensure that volume goes up and retail investors are able to buy stocks. "We were seeing falling of retail investors," she added.

On Wednesday, India's largest lender approved sub-division of one equity share into ten. Asked about expectation from the forthcoming monetary policy review, Bhattacharya said the RBI is likely keep interest rate unchanged.

The RBI is scheduled to announce bi-monthly monetary policy on September 30. SBI said in a statement later in the day that exposure of the bank to the affected companies by cancellation of 214 coal blocks by the Supreme Court was substantially lower. It does not apprehend any major problem or difficulty in recovery of the dues.