Bandhan Bank has decided to sell a big chunk of its old, unpaid loans, almost ₹7,000 crore, to companies that specialise in recovering bad debts. These loans are unsecured retail loans, mostly given to small businesses, micro-entrepreneurs, and group borrowers.
The bank says many of these loans have not been repaid for over six months, and some were already written off earlier because recovery seemed unlikely. Instead of keeping these stressed loans on its books, Bandhan now wants to hand them over to asset reconstruction companies (ARCs), which take on the risk and try to recover whatever money they can.
The overdue loans (₹3,212 crore) will be sold through a Swiss Challenge method, where the bank invites bids and then allows competing buyers to improve upon them. The written-off loans (₹3,719 crore) will be auctioned separately.
Most of these loans come from Bandhan’s micro-finance and small-business segments, borrowers who often run tiny shops, farms, or home-based enterprises. The bank says selling these loans will help it clean up its balance sheet and focus on healthier business.
If the sale attracts strong interest, Bandhan may consider more such transactions later.
Also Read: GAIL shares drop 6.5% after ₹65.69 tariff