What could be worst that this ? Once the iconic brand of Indian consumer durable segment ‘Videocon’ is now defaulter to Public sector bank. Videocon loan account with Dena Bank is declared by lender as ‘Bad’ and classified under None Performing Assets (NPA).
Account of Videocon with Dena Bank brought to NPA due to default on payments in the fourth quarter ended March 2017.
The total exposure of all the banks to Videocon is pegged at Rs 45,000 crore. Dena Bank exposure to the videocon industry is Rs 120 crore in the form of provisions (about Rs 90 crore) and reversal of interest income (Rs 28-30 crore) in the fourth quarter.
Two officials with other public sector bank said it is just a matter of time (some quarters) that all lenders would treat it as bad loan.
Videocon account was always under stress and a potential non-performing asset (NPA) for banks. Since Dena bank has declared the account under NPA , all other banks has to follow the suit within six month. Once all the bank declare the companies under NPA, it will bite the bullet in coming days.
Large public and private sector banks and also some foreign banks have an exposure to Videocon.