Public sector banks including State Bank of India, Bank of Baroda, Bank of India, Indian Overseas Bank have served notices to dozens of real estate companies to recover around Rs 20,000 crore of their exposure by March. The banks are now making efforts to recover their real estate loans which were restructured in the aftermath of global financial crisis in 2008.
However, some of the real estate companies which are currently witnessing low volume of business have already asked for further restructuring of these loans, a proposal which banks are generally not willing to endorse. M Narendra, CMD, IOB confirmed that the bank has sent notices to some of the real estate firms.
Nagesh Pydah, CMD, Oriental Bank of Commerce and RK Bakshi, executive director, Bank of Baroda, said efforts were being made to recover the loans to realty companies. A senior SBI official requesting anonymity said that the bank has taken action under the Sarfaesi Act which empowers the banks to seize and sell assets in case of defaults to recover their dues.
No confirmation of the banks’ move was available from the real estate companies. “We have sent notices to five-six real estate companies and asked them to repay our entire outstanding amount within 40-50 days. A majority of such accounts are related to IT parks and located at places like Bangalore, Hyderabad and Mumbai,” said Narendra.
However, some of the real estate companies which are currently witnessing low volume of business have already asked for further restructuring of these loans, a proposal which banks are generally not willing to endorse. M Narendra, CMD, IOB confirmed that the bank has sent notices to some of the real estate firms.
Nagesh Pydah, CMD, Oriental Bank of Commerce and RK Bakshi, executive director, Bank of Baroda, said efforts were being made to recover the loans to realty companies. A senior SBI official requesting anonymity said that the bank has taken action under the Sarfaesi Act which empowers the banks to seize and sell assets in case of defaults to recover their dues.
No confirmation of the banks’ move was available from the real estate companies. “We have sent notices to five-six real estate companies and asked them to repay our entire outstanding amount within 40-50 days. A majority of such accounts are related to IT parks and located at places like Bangalore, Hyderabad and Mumbai,” said Narendra.
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