Bandhan Bank obtains bid from ARC for sale of stressed assets; details here

Bandhan Bank has received a binding bid from an Asset Reconstruction Company (ARC) worth Rs 801 crore. The binding bid has been received for the written-off portfolio with an outstanding of Rs 8,897 crore. The private sector lender is going to take up the bidding according to the Swiss challenge method. According to an exchange filing by the lender on Wednesday, the decision of sale will be taken in line with the extant guidelines governing Swiss challenge method and the bank’s relevant policy. The bank’s decision comes after its board of directors approved the transfer of the group’s loan and small business and agri loan (SBAL) written-off portfolio to an ARC. It should be noted that the name of the ARC hasn’t been unveiled yet. Bandhan Bank’s non-performing assets (NPAs) improved to 7.19 percent as of 30 September 2022, from 10.8 percent in Q2 FY22. Its net NPAs improved further to 1.86 percent against 3.04 percent in Q2 FY22. Bandhan bank wrote off microfinance loans amounting to Rs 3,500 crore in the second quarter of this fiscal. The lender’s net profit for the second quarter of FY23 dropped 76 percent on a quarter-on-quarter basis. This happened because of the higher provisions as it wrote off microfinance loans. Last week, Bandhan Bank received a guarantee under Credit Guarantee Fund for Micro Units (CGFMU). CGFMU is a trust fund established by the central government which is managed by National Credit Guarantee Trustee Company (NCGTC). The fund has been set up for guaranteeing payment against default in loans extended to eligible borrowers by the banks. Bandhan Bank has received a claim of Rs 916.61 crore under the scheme for FY 2022-23. Its not just the Bandhan Bank that is conducting a transparent bidding process in line with the Swiss Challenge method. Yes Bank has also done the same under the aegis of Reserve Bank of India’s (RBI’s) master direction on the transfer of loan exposures. Recently, Yes Bank offloaded its stressed assets loan portfolio amounting to Rs 48,000 crore to J.C. Flowers Asset Reconstruction (JC Flowers ARC). Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.