This follows State Bank of India‘s list of Rs 96,000 crore bad loans across 331 accounts circulated to gauge investor interest, as reported by ET.
A Bank of India spokesperson could not immediately respond to a request for comment.
The bank has identified 56 accounts to be put up for sale, which includes the debt of companies like Videocon Oil Ventures Limited, Videocon Limited, Visa Power, and Coastal Energen, Gitanjali Gems. By selling these NPA accounts to asset reconstruction companies and other entities, Bank of India is looking to reduce its non-performing assets. As per the guidelines issued by the Reserve Bank of India (RBI), banks are required to create a list of non-performing assets at the beginning of each year, which they intend to sell. However, banks have the flexibility to modify the list by adding or removing accounts as per their discretion as the year progresses, an industry source said.
The list often includes accounts that are currently undergoing resolution processes in court or have been partly sold to asset reconstruction companies. This doesn’t necessarily mean that these loans will be sold only to ARCs or sold at all, solely because they are listed. While some accounts may eventually be sold to ARCs, others may be resolved through alternative methods like liquidation or restructuring in court.
The bank’s asset quality has shown improvement, with gross NPA declining to 6.67% and net NPA to 1.65% from 9.3% and 2.21% a year ago during the April-June quarter of FY24.
In June quarter, the bank’s net profit rose 176% to Rs 1,551 crore, compared to Rs 561 crore in the same period last year. This growth was driven by both core and non-core business expansion, along with reduced provisions for bad loans. Provisions and contingencies decreased by 38% to Rs 824 crore from Rs 1,322 crore a year ago. Out of this, provisions for bad loans stood at Rs 777 crore, down from Rs 1,305 crore, aligning with improved asset quality.
