India’s second-largest state-owned bank, Punjab National Bank (PNB), expects at least five percent of its loan portfolio to be restructured.

“Regarding the size of the loan portfolio, our rough estimate is that 5-6% of the loan portfolio could be eligible under the restructuring profile. But we will be able to get a better estimate by the end of September, ”PNB Managing Director and Managing Director SS Mallikarjuna Rao said at a press conference on Monday.

At the end of June, the size of the PNB loan portfolio stood at Rs 7.21 trillion. Thus, the bank expects loans worth Rs 36,000 to Rs 38,000 crore to take advantage of the restructuring window provided by the Reserve Bank of India (RBI). Rao said the majority of the restructured loan accounts will belong to the business segment. He added that the bank does not expect a large number of micro, small and medium enterprises (MSMEs) and personal account holders to opt for loan restructuring.

“Of the total loan portfolio of Rs 7.21 trillion, Rs 1.27 trillion belong to MSME categories. Of this total, around 14% belong to the non-productive asset (NPA) category, so the remaining MSME accounts will be eligible, which should not be high in terms of value, ”Rao added.

To date, the bank has authorized the restructuring of loans to the tune of Rs 1,300 crore for MSME accounts. The RBI had allowed banks to restructure MSME accounts last year due to economic tensions.

The RBI earlier this month announced a loan restructuring program for all types of borrowers – business, MSME and personal loan segments. For non-MSME account holders, such restructuring can be sought until December 31 of this year, provided the borrower is not in default for more than 30 days by March 1, 2020.

Rao added that the bank would get a clearer picture of the restructuring after considering the recommendations to be made by the committee appointed by the RBI and headed by senior banker KV Kamath on loan accounts worth more than 100 crore. rupees. PNB will receive approval from its board of directors on the terms of the restructuring by the end of this month.

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