Indian Overseas Bank Plans To Sell 46 NPA Accounts Worth Rs 11,500 Crore

In order to improve its asset quality, Indian Overseas Bank plans to sell 46 non-performing loan accounts worth Rs 11,500 crore, according to the lender's official statement.

The state-owned bank plans to conduct the sale through an e-auction process under the open auction method on a portfolio basis and has invited bids from asset reconstruction companies.

The portfolio comprises accounts financed under a consortium arrangement which also includes written off accounts, with some admitted under the National Company Law Tribunal.

Prospective buyers can bid on a portfolio basis, individual accounts, or groups of accounts, the statement said.

Eligible ARCs and other transferees may submit their expression of interest by Jan. 18 and participate in the e-auction scheduled for Jan. 30.

"the sale of MSME and educational loan portfolios to ARCs is also under active consideration, aligning with the bank’s strategy to enhance recovery outcomes and asset quality," Managing Director and Chief Executive Officer Ajay Kumar Srivastava was quoted in the press release.

As of Sept. 30, the bank’s gross NPA ratio was 2.72%, sharply lower than 11.69% as of March 31, 2021. Net NPAs also reduced to 0.47% in the quarter ended September from 3.58% in March 2021.

For the quarter ended September, the bank’s gross NPA was Rs 6,249 crore. Of this, RAM also known as retail, agriculture and micro, small and medium enterprises segment was Rs 4,610 crore, followed by Rs 1,357 crore of overseas NPA and Rs 282 crore of corporate NPAs.

Of the opening gross NPAs, write offs stood at Rs 370 crore. Recovery from technical write off accounts were Rs 1,041 crore and of this, reductions were Rs 988 crore at the end of September quarter.