Bandhan Bank on December 30 announced the sale of its stressed loans, worth Rs 8,897 crore, to an asset reconstruction company (ARC) for an amount of Rs 801 crore.
"The bank has transferred its group loan and small business agriculture loan (SBAL) technical written-off portfolio amounting to Rs 8,897 crores to an ARC, pursuant to Swiss challenge method, for a consideration amounting to Rs 801 crore, on security receipt consideration basis" it informed the stock exchanges.
"ARC along with investor has subscribed to 51.70 percent of security receipts amounting to Rs 414.04 crore, whereas, Bandhan Bank has subscribed to 48.30% of security receipts amounting to Rs 386.96 crore," the regulatory filing added.
The plan to transfer the non-performing assets (NPAs) to an ARC was approved by the bank's board of directors on December 21.
The SBAL or micro-advances had become stressed during various phases of operation since the bank's inception as a lender in August 2015, a source with knowledge of the matter told news agency PTI last week.
This is for the first time that the bank will sell stressed loans to an ARC, the person had said.
Under the Swiss challenge method, which was used for selling stressed loans, the bank receives bids on a reserve price, and the highest bidder gets hold of the portfolio.
Bandhan Bank had also written off micro-credit loans to the tune of Rs 3,535 crore during the second quarter of the current fiscal.
With PTI inputs
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