The bad loan that was transferred to NARCL or Bad Bank is Jaypee Infratech, which was among 12 major accounts referred by the Reserve Bank of India (RBI) to the National Company Law Tribunal (NCLT) in 2017.

“An account was already created (transferred to NARCL) last Friday. We were the leading bank on this account,” said Rakesh Sharma, IDBI Bank’s managing director and CEO, on Monday.

Bank recovery on the account is close to 45 percent.

While the total exposure of all banks to Jaypee Infratech was over Rs 9,000 crore, IDBI Bank’s exposure was Rs 3,750 crore.

Sharma said the bank had identified a total of Rs 10,000-11,000 crore in bad loans including JP Infratech to transfer to NARCL. In the quarter ended December 2022, the bank’s gross NPA decreased from 21.68 percent to 13.82 percent.

He said the bank expects an overall 4 percent reduction in GNPAs once all identified accounts are transferred to NARCL.

The transfer of Jaypee Infratech alone will reduce GNPA rates by 2.2 percent, Sharma said.

Minister of Finance Nirmala Sitharamanhad announced the establishment of one in the 2021-22 budget bad bench as part of the processing of stressed loans in the banking system.

NACL will acquire assets at a 15:85 ratio of cash and securities receipts (SRs).

SRs issued in favor of the transferring lenders are backed by a government guarantee for their face value.

In the same quarter, IDBI Bank’s net profit rose 60 percent to Rs.9.27 billion from Rs.5.78 billion in the same period last year.

The rise in profit was driven by net interest income which rose 23 per cent to Rs 2,925 crore from Rs 2,383 crore in the third quarter of the previous financial year.