SBI invites bids for selling NPAs worth Rs 217 crore

by Jeremy


Therefore, some of the accounts below Rs 500-crore exposure are being identified by the bank to be sold to existing ARCs.

Largest lender State Bank of India (SBI) on Wednesday invited bids for selling two non-performing assets (NPAs) worth Rs 217 crore on a 100% cash basis. The NPA sale assumes significance at a time when National Asset Reconstruction Company (ARC) or the bad bank is getting a final shape. SBI has set a reserve price of Rs 42.5 crore for two accounts, implying a haircut of 80%. The two accounts are – Khare and Tarkunde Infrastructure and Heavy Metal and Tubes.

According to sources, SBI is likely to put more NPAs accounts on sale this month, which will not be sent to National ARC. The proposed National ARC is expected to take over legacy stressed assets larger than Rs 500 crore in total exposure from banks. Therefore, some of the accounts below Rs 500-crore exposure are being identified by the bank to be sold to existing ARCs.

In the sale notice put up by SBI on Wednesday, the bank said bidders can submit expressions of interest till May 17, 2021. The process of e-bidding for two NPA accounts will be conducted on June 6, 2021. SBI has also specified to use the Swiss challenge method for auctioning. “The auction for above accounts is under Swiss challenge method, based on an existing offer in hand, who will have the right to match the highest bid,” SBI said in its sale notice.

Banks had put up NPAs worth Rs 5,140 crore for the sale to ARCs during the March quarter. Out of that, SBI had put bad loans worth Rs 1,337 crore up for sale to ARCs.

In a first step to set up the bad bank, Padmakumar M Nair, chief general manager at SBI, was appointed CEO of National ARC on Tuesday. Finance minister Nirmala Sitharaman in the Budget for 2021-22 had announced that an asset reconstruction company would be set up to consolidate and take over existing stressed assets of lenders and undertake their resolution.

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