Bandhan Bank to Transfer Rs 776 Crore Bad Loans to ARC, Receives Bid of Rs 280.39 Crore

22 Dec 2023 , 01:03 PM

On December 21, the board of directors of Bandhan Bank approved the transfer of non-performing loans (bad loans) amounting to Rs 776 crore to an asset reconstruction company (ARC), according to the bank’s filing to the stock exchanges.

The transferred loans are those that have been outstanding for more than 180 days and are part of the bank’s housing finance portfolio, with the data reflecting the situation as of September 30, 2023.

Bandhan Bank received a binding bid of Rs 280.39 crore for the said NPA portfolio, representing 36.15 % of the outstanding pool. The bid is on an Outright Cash consideration basis.

The bank is opting for a bidding process using the Swiss Challenge method, and the decision on the sale will follow the guidelines governing this method and the relevant bank policy, as stated in the exchange filing.

In the July-September quarter, Bandhan Bank’s gross non-performing asset (GNPA) increased by 14.8 % YoY, reaching Rs 7,874 crore. This is compared to Rs 6,854 crore in the same period the previous year and Rs 6,961 crore in the preceding quarter.

The net NPA ratio of the bank stood at 40 % YoY in July-September, with the net NPA for the reporting quarter amounting to Rs 2,366 crore, compared to Rs 1,679 crore in a similar period last year.

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