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Indian Overseas Bank to Sell Rs.11,500 Crore NPAs to ARCs


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Chennai-based Indian Overseas Bank (IOB) announced on Thursday that it plans to sell non-performing assets (NPAs) worth ₹11,500 crore to asset reconstruction companies (ARCs). The bank has invited expressions of interest (EoIs) from ARCs to participate in the sale process.

Details of the Sale

In an official statement, the state-run lender revealed that the sale includes 46 loan accounts. These accounts are part of a portfolio that involves loans financed under a consortium arrangement, with some cases admitted under the National Company Law Tribunal (NCLT).

The sale will be conducted through an e-auction using the open auction method. Prospective buyers have the option to bid for the entire portfolio, individual accounts, or groups of accounts.

Focus on Recovery and Value Maximisation

Ajay Kumar Srivastava, Managing Director and Chief Executive of IOB, emphasized the bank’s commitment to resolving stressed assets. “Our focus is on value maximisation through various recovery measures, including SARFAESI actions, compromise settlements, and sales to ARCs,” he said.

Srivastava also mentioned that the bank is considering selling small business and educational loan portfolios to ARCs as part of its strategy to improve recovery outcomes and enhance asset quality.

Timeline and Eligibility

Eligible ARCs and other transferees are required to submit their EoIs by January 18. The e-auction for the 46 accounts is scheduled to take place on January 30.

Decline in Gross NPAs

The bank’s gross NPA ratio has significantly improved, standing at 2.72% as of September 2024. This marks a sharp decline from the peak of 11.69% recorded in March 2021.

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