Bandhan Bank to sell stressed loans to ARC for the first time: Source

Bandhan Bank's announcement of sale of stressed loans to an asset reconstruction company (ARC) will be the first such instance for the private lender, a source in the bank said.

The lender had on Wednesday said it will sell stressed loans to an ARC after a portfolio of Rs 8,897 crore was written off.

The bank has received binding bid from an ARC, amounting to Rs 801.00 crore..., it had said in an exchange filing.

The written off amount was on account of small businesses and agriculture loans (SBAL) or micro-credit advances, the source said.

It had become stressed during various phases of operation since the bank's inception as a lender in August 2015.

This is for the first time that the bank will sell stressed loans to an ARC, he said.

The bidding will be as per the Swiss Challenge Method (SCM) on a binding bid of Rs 801 crore offered by the ARC.

Under SCM, the bank will receive bids on the reserve price of Rs 801 crore, and the highest bidder will get hold of the portfolio, the source said.

Bandhan Bank had also written off micro-credit loans to the tune of Rs 3,535 crore during the second quarter of the current fiscal.