The country largest lender, State Bank of India (SBI) has started the process of selling non-performing assets (NPAs) worth Rs 1,580 crore to financial institutions.
The report said 11 non-performing assets have been put up for sale through a bidding process. The bank has managed to sell bad loans worth Rs 763 crore to asset reconstruction companies (ARCs) in the last two quarters of this financial year.
On an earnings call on November 10, Rajnish Kumar, Chairman of SBI has said the bank will sell only those assets where an intended price is earned.
Banks are selling only those assets where they are able to get full cash or higher cash component as they are required to provide more money in reserve from this fiscal on sale of assets where it gets more than 50 percent in security receipt.The proportion of cash component in the deal done with ARCs constitutes only 15 percent of net asset value upfront and security receipts consist 85 percent.