MUMBAI: For the first time, mid-sized state-run Dena Bank is planning to sell small ticket non-performing assets of up to Rs 2 lakh to asset reconstruction companies (ARCs) in the current quarter.
The bank has been selling big-ticket non-performing loansto the ARCs uptil now. "We are putting on block smaller loans of up to Rs 2 lakh, which have become NPAs, to ARCs. The process is on and we will be able to put these accounts on sale in the next one month," bank's executive director R K Takkar told PTI.
He said it would be a mix of retail as well as commercial loans. But he did not specify the total quantum of assets put on the block.
The bank has again put on auction Rs 470 crore worth of non performing loans in the current quarter after it did not receive good response from bidders for the same assets in the previous auction.
Of the Rs 470-crore NPAs put on sale the bank was able to realise Rs 30 crore only. "The amount realised was around Rs 30 crore," Takkar said.
In the fourth quarter of last year, the bank had put on sale around Rs 500 crore of NPAs to ARCs but it could realise Rs 10 crore. The poor response from ARCs was due to higher reserve price which the bank had quoted.
"Our reserve prices were higher earlier. Roughly we were able to reduce our reserve price by 10 per cent in the auction held in the second quarter," he said. The bank will again try to sell the balance NPAs in this quarter, he said.