Indian Overseas Bank Unveils Mega NPA Sale

Indian Overseas Bank is selling Rs 11,500 crore in non-performing assets through an e-auction. The bank aims to resolve financial stress and maximize value via asset reconstruction companies. Their strategy includes the sale of small business and educational loans, with bids closing on January 18.

Indian Overseas Bank (IOB), a state-run lender, announced on Thursday its decision to sell a substantial amount of non-performing assets totaling Rs 11,500 crore. The move invites asset reconstruction companies (ARCs) to express interest in acquiring 46 distressed loan accounts, according to a bank statement.

The sale, to be held through an e-auction employing an open auction method, involves accounts financed under consortium arrangements, with some admitted under the National Company Law Tribunal (NCLT) proceedings. Potential bidders can opt to bid on a collective portfolio basis, individual accounts, or specific groups of accounts.

Ajay Kumar Srivastava, IOB's Managing Director and Chief Executive, emphasized the bank's focus on resolving financial stress by maximizing asset value through various recovery measures. These include SARFAESI actions, compromise settlements, and sales to ARCs. The bank also plans to sell small business and educational loan portfolios to further enhance recovery outcomes and asset quality.

(With inputs from agencies.)