Largest lender State Bank of India (SBI) on Wednesday invited bids for promoting two non-performing assets (NPAs) worth Rs 217 crore on a one hundred% money basis. The NPA sale assumes significance at a time when National Asset Reconstruction Company (ARC) or the poor bank is having a final shape. SBI has set a reserve cost of Rs 42.5 crore for two accounts, implying a haircut of 80%. The two accounts are – Khare and Tarkunde Infrastructure and Heavy Metal and Tubes.
According to sources, SBI is probably to place more NPAs accounts on sale this month, which will not be sent to National ARC. The proposed National ARC is anticipated to take more than legacy stressed assets bigger than Rs 500 crore in total exposure from banks. Therefore, some of the accounts beneath Rs 500-crore exposure are becoming identified by the bank to be sold to current ARCs.
In the sale notice place up by SBI on Wednesday, the bank stated bidders can submit expressions of interest till May 17, 2021. The method of e-bidding for two NPA accounts will be performed on June 6, 2021. SBI has also specified to use the Swiss challenge process for auctioning. “The auction for above accounts is under Swiss challenge method, based on an existing offer in hand, who will have the right to match the highest bid,” SBI stated in its sale notice.
Banks had place up NPAs worth Rs 5,140 crore for the sale to ARCs through the March quarter. Out of that, SBI had place poor loans worth Rs 1,337 crore up for sale to ARCs.
In a initially step to set up the poor bank, Padmakumar M Nair, chief basic manager at SBI, was appointed CEO of National ARC on Tuesday. Finance minister Nirmala Sitharaman in the Budget for 2021-22 had announced that an asset reconstruction corporation would be set up to consolidate and take more than current stressed assets of lenders and undertake their resolution.