Indian Bank to seek bids for sale of NPAs worth Rs 1,100cr 

Indian Bank to seek bids for sale of NPAs worth Rs 1,100cr 

Context

• The Chennai-based Indian Bank has decided to invite bids for sale of NPAs (non-performing assets) worth close to 1,100 crore.

The sale

• NPA’s covering over 8,250 accounts will be sold and the sale is without any recourse to the bank.
• The bank has invited proposals from eligible asset reconstruction companies (ARCs), banks, non-banking financial companies and financial institutions.
• The deadline e had been set to November 30 for submission of the bids.
• The sale will comprise seven NPA accounts with a book balance of 25 crore and above worth 572 crore.

Top three

• The bank will be short listing the top three bidders based on the bid amount quoted.
• It could adopt either the e-auction process or could go for negotiation with the highest bidder as recommended by the asset sale committee.
• Though the bank has indicated the reserve prices for these NPA categories, the ultimate reserve price for each portfolio of accounts would be based on the dues on the cut-off date i.e. November 24, 2017.
• Indian Bank is attempting to bring down the gross NPAs to below 5% or at least in the range of 5-5.5% from the current level of 7% and the net NPAs to less than 3% from the current level of 4%.