Introduction

While India's financial stability was on a defined trajectory, COVID-19 disrupted everything and exacerbated the trouble with stressed assets. Experts have opined that the second wave of COVID-19 would probably worsen stressed assets in the banking system. This has been seen as a case of one step forward, two steps back.

Since 2015, the Indian banking system has been acquiescing crack after crack under the burden of NPAs (non-performing assets). To combat this, mechanisms like the Insolvency and Bankruptcy Code was implemented to deal with the blowback ending up with the pandemic causing the situation to go back to square one. The RBI alleges that NPAs could go up to 13.5% by the end of this year and with an unsupportive macroeconomic framework, may end up going to 14.8% as well. This is going to continue to weaken India's financial stability with low credit growth and can see it happening.

Furthermore, India has a history of bad debt and a pattern of not being able to size up the issues at hand. One solution is to launch a bad bank with the goal of housing bad loans, but experts believe it would be a long time before it starts to be effective and this can only truly facilitate change if the assets get resolved and aren't just kept stagnant like in a storage facility. How do we better resolutions and accelerate digital infrastructure to combat this? Is it feasible? Will the cracks deepen? The gravity of the situation at hand and the rise in bad banks has reoriented the discourse surrounding stressed assets.

We need to ascertain the strategies and what structures one can employ as buyers, as well as assess the complexities and arising opportunities there would be in the stressed asset space. All of this and much more from bankers, policymakers, investors and other key stakeholders at India’s most compelling thought leadership forum at the VCCircle Stressed Assets Investment Summit 2021 on August 13, 2021 on a virtual platform.


Agenda

9:30 AM onwards
  • 9:30 AM – 9:40 AM

    Opening Address

  • 9:40 AM – 10:00 AM

    Keynote Address: Caught In The Middle Of the Storm

    The second wave of COVID-19 has been severely damaging to stressed assets in the banking system, worsening it to macabre proportions and in the process, weakening the country’s financial stability. We’ve seen bad loans experiencing a spike with NBFCs and microfinance institutions. What’s the current scenario? What’s the future of this? How can this bounce back to a path of recovery?

  • 10:00 AM – 10:35 AM

    Panel Discussion 1: Pre-pack Insolvency: A relief to MSMEs?

    Pandemic has pushed many companies specially MSMEs to go for insolvency due to disturbances in macroeconomic factors. In most of the cases, it isn’t attributed to company’s internal factors. To help such MSMEs, the government has announced pre-packed insolvency resolution. Is it going to help MSMEs? The session would focus on how the creditors are protected and how is it better than CIRP?

  • 10:35 AM – 11:10 AM

    Panel Discussion 2: The Resolve Of Bad Banks

    Soon, we may have a bad bank. The Indian Banks’ Association (IBA) has a plan to establish a 6000 crore rupees NARCL (The National Asset Reconstruction Company Limited). The goal to clean up the bank books has also been prominently voiced. The idea is to manage the bad debt of public sector banks and other financial institutions. But how is it different from other ARCs (asset reconstruction companies)? Would there be additional tools of resolution? What are feasible roads for this?

  • 11:10 AM – 11:30 AM

    Special Address: Distressed investing - Indian opportunity on a global stage

  • 11:30 AM – 12:05 PM

    Panel Discussion 3: Financial Institutions Under Stress: What lies ahead?

    The RBI’s Financial Stability Report disclosed that GNPAs of financial institutions (NBFCs) increased to 6.3% as of March 2020 from 5.3% as of March 2019. The asset quality of NBFCs is expected to deteriorate further due to disruption of business operations caused by the pandemic. Many NBFCs are filling for insolvency due to the stressed assets and liquidity crunch. One such recent example is of DHFL. There are many opportunities which lies in the sector. How can these opportunities be leveraged? Would finding a new investor/owner for stressed NBFCs solve the problem?

     

  • 12:05 PM – 12:40 PM

    Panel Discussion 4: New Stress Pockets: Impact and the way forward

    In December 2020, global financial services firm, Macquarie Securities has predicted gross NPAs in the retail portfolio to double to 4%, mentioning that market shouldn’t be concerned over retail defaults. However, with the second wave of Covid, unsecured personal loans, credit card outstanding, business banking and MSMEs became new pockets for NPAs. It involves loans worth INR 28-30 lakh crore accounting for 30% of the total bank loan book.
    In 2020-21, the banks' maximum slippages have been coming from retail portfolio. Now, private banks have a higher share price of unsecured retail whereas PSBs have more stressed MSMEs in their portfolios. How should bank deal with this situation? How to resolve retail NPAs problem and what is the way forward?

  • 12:40 PM – Onwards

    End of Conference


Speakers 2021

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Neeraj Seth

Managing Director, Head of Asian Credit, BLACKROCK
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Amit Kansal

Chief Investment Officer, Aditya Birla Stressed Asset AMC Pvt. Ltd.
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Eshwar Karra

CEO, Kotak Special Situations Fund
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Rahul Chawla

Co Head, Investment Banking Coverage, Deutsche Bank
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Raman Aggarwal

Director, Finance Industry Development Council
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Manish Nihalani

Chief Operating Officer, Alchemist Asset Reconstruction Company Ltd.
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Nitin Jain

Senior Partner, AAA Insolvency Professionals LLP
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Pradeep Goel

CMD, Prudent ARC Ltd. & Vice Chairman, ARC Association of India
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Girish Sharan Sinha

MD & CEO, ASREC (India) Ltd.

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