Business IdeasArcil falls 30% short of bad debt acquisition target: CEO
India"s largest asset reconstruction company Arcil today said it is 30 per cent short of its target of buying bad debts worth Rs 1,800 crore from banks and financial institutions so far this fiscal.
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"We are 30 per cent short of our original target (of acquiring bad debts) of Rs 1,800 crore so far this fiscal," Arcil"s Chief Executive Officer and Managing Director S Khasnobis told reporters on the sidelines of AVCJ Private Equity conference here.
Khasnobis said "less flow" from the corporate sector as the Reserve Bank of India (RBI) allowed banks to restructure slippages either by extending the repayment time or giving interest rate relaxation caused the firm to be behind target.
The RBI allowed banks to restructure their corporate advances as the global financial crisis hit demand and in turn, adversely impacted profitability, resulting in an increase in defaults.
Arcil could acquire only around Rs 1,260 crore debt while it should have actually bought around Rs 1,400 crore had it been on target.
A large proportion of bad debts bought came from retail portfolios and the rest from corporates, Khasnobis said. "Majority was retail," Khasnobis said.
Arcil is India"s largest asset reconstruction company and its promoters include the State Bank of India, IDBI Bank, ICICI Bank and Punjab National Bank.