Bandhan Bank has decided to offload unsecured retail bad loans — including non-performing assets and written-off accounts — totalling nearly Rs 7,000 crore to asset reconstruction companies and other eligible buyers, it said in stock exchange filing on Thursday. This marks one of the largest retail-loan sale exercises by a private-sector lender in recent times.
The portfolio up for sale includes roughly Rs 3,212.17 crore in loans that are overdue by more than 180 days as of September 30, 2025, and another Rs 3,719.14 crore in written-off accounts, the Bank stated in the corporate filing. These loans primarily come from the bank’s micro-finance and small-business lending operations, under its “Emerging Entrepreneurs’ Business” (EEB) and “Aspiring Business Group” (ABG) portfolios — covering group loans, small-business loans, agricultural loans and similar unsecured retail exposures.
To monetise this bad-loan pool, Bandhan Bank will invite bids under a structured process. The overdue NPA portion will be sold through the “Swiss Challenge” method, where initial binding bids are followed by counter-bids to ensure competitive pricing. The written-off portion will be offered via a direct auction route.
The motivation behind this exercise appears to be a concerted attempt to clean up the bank’s balance sheet, reduce its stressed-asset burden and improve its overall asset quality. This comes in the backdrop of rising stress in micro-finance and small-business segments — aligning with a trend where several lenders are looking to offload stressed retail and micro-finance loan books.
Bandhan Bank has hinted that if the current sale sees strong interest and good bids from ARCs, it may consider selling additional such loan pools in the future — indicating that this could be the first of multiple rounds of stressed-asset clean-up.
The success of this exercise, and the valuations realised by the acquiring ARCs, will be critical in determining how effectively Bandhan Bank can shore up its finances and regain stability in its retail-loan book.