State-owned Indian Overseas Bank (IOB) has announced plans to sell ₹11,500 crore worth of non-performing assets (NPAs) to asset reconstruction companies (ARCs). The Chennai-based lender revealed the move on Thursday, inviting expressions of interest (EoIs) from ARCs for the sale of 46 loan accounts.
The bank will conduct the sale via an e-auction on January 30, adopting an open auction method on a portfolio basis. The portfolio includes accounts financed under consortium arrangements, with some already admitted under the National Company Law Tribunal (NCLT). Bidders can opt to bid for the entire portfolio, individual accounts, or specific groups of accounts, the bank said.
Ajay Kumar Srivastava, Managing Director and CEO of IOB, emphasized the bank’s commitment to maximizing value through recovery measures, including invoking SARFAESI actions, compromise settlements, and sales to ARCs. He also hinted at the potential sale of small business and educational loan portfolios, aligning with the bank’s broader strategy to improve recovery outcomes and asset quality.
Eligible ARCs and transferees must submit their EoIs by January 18 to participate in the auction.
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IOB’s gross NPA ratio stood at 2.72% as of September 2024, significantly reduced from its peak of 11.69% in March 2021, reflecting its ongoing efforts to clean up its balance sheet and strengthen asset quality.
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