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PNB says 65% exposure in Zoom Developers is insured
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merisarkar news service
New Delhi, October 07, 2010 |
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Exposure to 'Zoom Developvers' is insured: PNB
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India's leading public sector bank Punjab National Bank said that most of its exposure in real estate firm Zoom Developers, that defaulted on payment, is insured and initiatives are on to recover the loans. The bank has exposure to the tune of Rs 400 crore in Zoom Developers, of this Rs 250 crore is covered under insurance, Punjab National Bank executive director MV Tanksale said.
The bank had taken insurance cover from Export Credit Guarantee Corporation of India Ltd (ECGC).
At the same time PNB has declared this as NPA following the default by the company and requisite provisioning has been done, he said.
All relevant departments, including vigilance and audit, are looking into the matter, he added.
Besides, the Finance Ministry has asked for the comment of the bank on the financing to the Mumbai-based firm.
As many as 27 banks are involved in Rs 2,700 crore total advances made to Zoom Developers, a project development company with majority of its projects overseas, particularly in the China, Europe and the UAE.
All the banks have filed case with Corporate Debt Restructuring (CDR).
The banks have classified the account as an NPA as the outstanding due to invocation was more than 90 days.
Under the law, when a loan account is not serviced for a quarter or 90 days, it turns bad and banks need to provide for it.
Banks have appointed specialised firms like SBI Caps to look into the process of CDR.
While SBI Caps' mandate is restructuring the firm, Mott MacDonald, a managing engineering and development consultancy firm, has been appointed to do a survey of the sites the company was working on and find a case for recovering dues.
Lazard India is working on a business plan for the company.
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