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    Bank of Baroda sets up ‘war room lawyer team’ for bad loan recovery

    Synopsis

    Such recovery efforts are expected to bring back the bank’s profits.

    Bank of Baroda
    In the January-March quarter of 2018, the bank incurred a net loss of Rs 3,102 crore. In the same period last year, it had made a net profit of Rs 154 crore.
    Mumbai: Bank of Baroda has set up a dedicated team of lawyers to speed up recovery of bad loans that get embroiled in litigation.

    The state-owned bank has 380 high-value bad loan accounts with a total outstanding of about Rs 15,000 crore. In these, the bank is either the sole lender or the consortium leader.

    “We have commenced aggressive action for recovery and have started monitoring directly the progress of enforcement action in those high-value accounts,” said Venugopal Narayanan, head – legal, Bank of Baroda. “We would be recruiting about 50 more inhouse lawyers this financial year to strengthen our legal team.”

    Such recovery efforts are expected to bring back the bank’s profits, erased by higher provisions against bad loans. In the January-March quarter of 2018, the bank incurred a net loss of Rs 3,102 crore. In the same period last year, it had made a net profit of Rs 154 crore.

    According to Narayanan, a team of inhouse lawyers are coordinating directly with branches to hasten the recovery process. The ‘War Room Team’, as the staff call it, interacts directly with the branches, dealing with advocates and enforcement agencies to ensure early settlement for the bank.

    Besides, Bank of Baroda has also created a stressed asset management vertical, under which 15 existing stressed asset-recovery branches and another 32 newly-created regional stressed asset recovery branches are working. The bank is in the process of opening 10 more such branches.

    Bank of Baroda snip 1

    The bank said it sees twin benefits—firstly, the regular branches will be relieved from the recovery responsibility, which will allow them to focus on acquiring new business and preventing fresh slippages of accounts to NPA. Secondly, since the bad loan accounts are with specialised recovery branches, the regular branches will be able to focus on chasing the NPA customers and could bring early recovery for the bank.

    “The Legal War Room will monitor the progress of recovery actions made by those specialised branches, over and above the identified 380 accounts,” said Venugopal.

    Moreover, the bank has started special grooming of officers on various modes of recovery before they are posted to the stressed assets branches.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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