ESAF Small Finance Bank Sells Rs 733 Crore Bad Loans To ARC For Rs 73 Crore

ESAF Small Finance Bank has announced the sale of a significant portfolio of non-performing assets and technically written-off loans, with an outstanding value of Rs 733.4 crore as of March 31, 2025 to an Asset Reconstruction Company, the lender said in an exchange filing.

The transaction, finalised through the Swiss Challenge Method, fetched a consideration of Rs 73.34 crore for the bank.

The move follows the bank’s earlier disclosure on June 18, where its board approved the sale of these stressed assets to improve the bank’s balance sheet.

The completion of this sale marks a major step in ESAF’s ongoing efforts to strengthen asset quality and enhance operational efficiency.

This strategic clean-up is expected to bolster investor confidence and position ESAF Small Finance Bank for future growth amid a slowing credit environment.

As of March end, gross NPA and net NPA ratios of the small finance bank remained flat sequentially at 6.9% and 2.9%, respectively.

During the period, the bank wrote off bad loans worth Rs 345.1 crore.