Allahabad Bank has put on sale its loans to 55 different entities worth Rs 901.07 crore. It has sought bids from asset reconstruction companies (ARCs) on a cash basis or through a mix of cash and security receipts (SRs), according to a sale document.
Allahabad Bank has put on sale its loans to 55 different entities worth Rs 901.07 crore. It has sought bids from asset reconstruction companies (ARCs) on a cash basis or through a mix of cash and security receipts (SRs), according to a sale document. Prospective bidders are required to submit their expressions of interest by January 20 and complete their due-diligence by February 5. Bidding for the assets will be held on the bank’s e-auction platform on February 7. “Under no circumstances successful bidders can refuse to complete the transaction citing any reason or defects/objection in any account. lf they do so, the matter will be reported to RBI (Reserve Bank of India) & the ARC association for taking necessary action,” Allahabad Bank said in its notice. The bank added that since the sale is on ‘as is where is basis’, therefore, site visits are not envisaged.
A chunk of the loans on sale, worth Rs 368 crore, are from the New Delhi circle, while the Mumbai and Kolkata circles account for Rs 258.7 crore and Rs 108.13 crore, respectively. The rest are from the Bhopal, Hyderabad and Ranchi circles.The largest of these accounts are Delhi-based Jay Polychem India where the bank’s exposure is Rs 170.12 crore, Mumbai-based Chandra Proteco where the exposure is Rs 101.4 crore and Chennai-based Surana Industries where its exposure is Rs 97.82 crore. The Kolkata-based lender has sold loans worth Rs 227 crore in the first two quarters of FY18. It had also sold loans worth Rs 64 crore in the fourth quarter of FY17 to ARCs, but no such sales were done in the first three quarters of the year.
Earlier this month, the RBI had initiated prompt corrective action (PCA) against Allahabad Bank, after which NK Sahoo, executive director at the bank, had told FE that the focus at the bank will be on recoveries and reduction of slippages. “If these two things happen, probably our positions will be much improved. If we have to do less provisions, our profitability will go up. We will not be going for high risk advances. We have to be very, very selective when any high risk proposal comes,” he had said.