Supreme Court's cancellation of coal block allocations in 2014 has thrown up an unexpected opportunity to the banking sector to recover part of their core sector loans that has turned non-performing assets (NPA).
Banks like UCO Bank and State Bank of India (SBI) have got the approval of the coal ministry to take away part of the compensation payable by the new owners of such coal blocks to the prior owners as settlement of money invested by the latter in developments of the mines which were subsequently de-allocated.
While UCO Bank has got hold of Rs 23.31 crore payable by the new owner JSW Steel to prior allottee Jayaswal Neco, SBI would receive Rs 8.54 crore against loans to SovaIspat and Jai Balaji Sponge, the erstwhile joint owners of the block, letters issued by the ministry revealed.
The banks, however, are not getting back their full exposure to the specific projects but only to the extent the prior allottees had spend on land and mine infrastructure.
The Kolkata-based UCO Bank had extended the loan to Jayaswal Neco for the development of Moitra block. The accepted claim under the Coal Mines (Special Provisions) Rules comes to Rs 53.55 crore.
The money spent by Jayaswal Neco for the land has been calculated at Rs 25.95 crore, of which Rs 2.64 crore has been held back because of being disputed. The balance Rs 23.31 crore, due to Jayaswal Neco, would now be handed over to UCO Bank for part-settlement of its Rs 53.55 crore dues.
Similarly, SBI would be getting Rs 8.54 crore against Rs 10.59 crore given as loan for development of Ardhagram coal block jointly owned by SovaIspat and Jai Balaji Sponge.
"The accepted claim of State Bank of India against the said mine is Rs 10.59 crore. As per Section 9 of the said Act (Coal Mine Special Provision Rules 2014) read with Rules 15, the claim of the secured creditor is to be settled prior to the settlement of the claim of government authorities. The amount available for release is Rs 8.54 crore whereas the claim of secured creditor SBI is Rs 10.59 crore," the letter issued by the coal ministry said.
The government in September issued a mine-wise provisional list of admissible compensation amount with respect to 35 coal mines. In June, claims from secured creditors like banks and also government authorities were invited in respect of Schedule 1 mines. While banks and other government agencies responded with the claims against these 35 mines, the ministry would be giving preference to the creditors.
Banks like UCO Bank and State Bank of India (SBI) have got the approval of the coal ministry to take away part of the compensation payable by the new owners of such coal blocks to the prior owners as settlement of money invested by the latter in developments of the mines which were subsequently de-allocated.
While UCO Bank has got hold of Rs 23.31 crore payable by the new owner JSW Steel to prior allottee Jayaswal Neco, SBI would receive Rs 8.54 crore against loans to SovaIspat and Jai Balaji Sponge, the erstwhile joint owners of the block, letters issued by the ministry revealed.
The banks, however, are not getting back their full exposure to the specific projects but only to the extent the prior allottees had spend on land and mine infrastructure.
The Kolkata-based UCO Bank had extended the loan to Jayaswal Neco for the development of Moitra block. The accepted claim under the Coal Mines (Special Provisions) Rules comes to Rs 53.55 crore.
The money spent by Jayaswal Neco for the land has been calculated at Rs 25.95 crore, of which Rs 2.64 crore has been held back because of being disputed. The balance Rs 23.31 crore, due to Jayaswal Neco, would now be handed over to UCO Bank for part-settlement of its Rs 53.55 crore dues.
Similarly, SBI would be getting Rs 8.54 crore against Rs 10.59 crore given as loan for development of Ardhagram coal block jointly owned by SovaIspat and Jai Balaji Sponge.
"The accepted claim of State Bank of India against the said mine is Rs 10.59 crore. As per Section 9 of the said Act (Coal Mine Special Provision Rules 2014) read with Rules 15, the claim of the secured creditor is to be settled prior to the settlement of the claim of government authorities. The amount available for release is Rs 8.54 crore whereas the claim of secured creditor SBI is Rs 10.59 crore," the letter issued by the coal ministry said.
The government in September issued a mine-wise provisional list of admissible compensation amount with respect to 35 coal mines. In June, claims from secured creditors like banks and also government authorities were invited in respect of Schedule 1 mines. While banks and other government agencies responded with the claims against these 35 mines, the ministry would be giving preference to the creditors.
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