Indian Bank has decided to invite bids for sale of NPAs (non-performing assets) worth close to ₹1,100 crore.
Covering over 8,250 accounts, these NPAs will be sold “as is where is and as is what is basis,’’ the bank said. And, the sale is “without any recourse to the bank,” it added.
The Chennai-based bank has invited proposals from eligible asset reconstruction companies (ARCs), banks, non-banking financial companies and financial institutions. It has set November 30 as the deadline for submitting the bids.
The sale will comprise seven NPA accounts with a book balance of ₹25 crore and above worth ₹572 crore; 27 NPA accounts with book balance of ₹5 crore and above and less than ₹25 crore amounting to ₹308 crore; 36 accounts with a book balance of above ₹1 crore and less than ₹5 crore totalling ₹81 crore; 145 accounts with a book balance of ₹10 lakh and above and less than ₹1 crore aggregating ₹43 crore; 6,320 accounts with a book balance of ₹10,000 and above less than ₹10 lakh worth ₹56 crore; and 1,720 accounts with a book balance of ₹10,000 and above and less than ₹1 crore totalling ₹42 crore.
Top three
The bank will shortlist the top three bidders based on the bid amount quoted.
It could adopt either the e-auction process or could go for negotiation with the highest bidder as recommended by the asset sale committee.
Though the bank has indicated the reserve prices for these NPA categories, the ultimate reserve price for each portfolio of accounts would be based on the dues on the cut-off date i.e. November 24, 2017.
For the quarter ended June 30, the bank reported a lower net NPA of ₹5,238 crore (4.05%) against ₹5,552 crore (4.48%) in the previous year quarter. In the preceding quarter ending March 2017, the net NPA was ₹5,606 crore (4.39%).
In a recent interview to The Hindu , Indian Bank managing director and chief executive officer Kishor Kharat said that the bank was attempting to bring down the gross NPAs to below 5% or at least in the range of 5-5.5% from the current level of 7% and the net NPAs to less than 3% from the current level of 4%.
