SBI on a buyer lookout for sale of Rs 96,000 crore distressed loans

7 Aug 2023 , 01:27 PM

State Bank of India plans to sell its distressed loan portfolio worth Rs 96,000 crore to asset reconstruction companies in an attempt to clear its books.

The country’s largest bank circulated a list of 331 accounts containing loans totaling Rs 96,278 crore to Future Group, Anil Ambani-backed companies, Videocon Group, and Jaypee Group, among others, as shown in a copy of the bank’s memo disseminated.

According to persons involved in the acquisition of stressed loans, SBI circulate the list to ARCs seeking preliminary interest in July.

According to reports in May 2022, SBI circulated 168 accounts with Rs 31,363 crore in distressed loans last year. The tripling of SBI’s stressed loans–a proxy bank for the economy–indicates that non-performing loans are on the rise, despite bankers’ claims that they have peaked.

The increase in distressed loan sales comes despite a drop in gross nonperforming loans to Rs 91,328 crore as of June 30, 2023, down from Rs 1,13,272 crore in the same quarter last year.

The list includes the loan of Rs 2,254 crore to Future Group, Anil Ambani Group firms received a loan of Rs 5,440 crore, Jaypee Group received a loan of Rs 4,701 crore, and Videocon Group received a loan of Rs 9,504 crore.

At around 1.24 PM, SBI was trading 0.80% lower at Rs 568.70, against the previous close of Rs 573.30 on NSE. The counter touched an intraday low of Rs 567.10.

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