PNB to transfer Rs 8,000 crore loans to bad bank

State-run lender Punjab National Bank will transfer bad loans of Rs 8,000 crore to the proposed bad bank, said its chief SS Mallikarjuna Rao. The lender on Friday declared a standalone net profit of Rs 586.33 crore for the quarter ended March 31, 2020.

National Asset Reconstruction Company or NARCL is expected to be operational by next month. “In the first tranche roughly Rs 8,000 crore of assets is identified by PNB,” said Rao, adding that bank will take equity participation in the bad bank but it will be less than 10%.PNB is further looking to monetise its non-core assets and will exit out of Canara HSBCLIFE Insurance where it holds 23% stake. “The process may take anything from 12 to 18 months,” said Rao adding that the time horizon will depend on time taken to complete the formalities which include selecting a merchant banker, actuary, legal counsel, and go through the process. The lender expects a near three-fold jump in its net profit to Rs 6,000 crore during the current fiscal as consolidation process is over.

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