Bandhan Bank has successfully concluded the sale of substantial unsecured non-performing asset (NPA) and written-off loan portfolios to Asset Reconstruction Companies (ARCs), marking a significant milestone in the bank's asset quality management strategy. The transactions, approved by the board of directors, involved two separate portfolio sales totaling ₹6,872.36 crore in outstanding principal.

ARCIL Transaction Details

The first major transaction involved the sale of an unsecured NPA portfolio to Asset Reconstruction Companies (India) Ltd (ARCIL) through the Swiss Challenge Method. ARCIL emerged as the winning bidder for this severely distressed portfolio.

Phoenix ARC Transaction

In a separate transaction, Bandhan Bank sold an unsecured written-off loan portfolio to Phoenix ARC Private Ltd through an auction process. Phoenix emerged as the highest bidder for this portfolio comprising loans from the Emerging Entrepreneurs Business (EEB) and Aspiring Business Group (ABG) segments.

Transaction Structure and Process

Both transactions were executed on a security receipts (SR) basis, with the bank retaining significant stakes in the portfolios. The board had previously approved the sale of identified NPAs and written-off portfolios belonging to the Emerging Entrepreneurs Business (EEB), including group loans and small business and agri loans, and the Aspiring Business Group (ABG) segments.

The Swiss Challenge Method used for the ARCIL transaction allowed for competitive bidding, while Phoenix ARC secured the second portfolio through a standard auction process. These structured approaches ensured competitive pricing for the distressed assets.

Market Performance

Shares of Bandhan Bank ended at ₹145.85, up by ₹0.97, or 0.67%, reflecting positive market sentiment following the announcement of these strategic asset sales. The transactions are expected to help improve the bank's asset quality metrics and strengthen its balance sheet position.

The Reserve Bank of India has approved Ratan Kumar Kesh's return as Executive Director at Bandhan Bank , marking a significant development in the bank's leadership structure.

Regulatory Approval

The RBI's approval is a crucial step for senior executive appointments in banking institutions, as regulatory clearance is mandatory for key leadership positions in the financial sector.

Leadership Development

This appointment represents an important addition to Bandhan Bank's executive team, with Kesh returning to the Executive Director role at the institution.

The approval process reflects the regulatory oversight that governs senior appointments in India's banking sector, ensuring appropriate leadership standards are maintained across financial institutions.