Bandhan Bank's board approved selling Rs 303.74 crore in non-performing housing finance loans. The bank will use Swiss Challenge bidding with ARCs to resolve stressed assets and improve its balance sheet.

Bandhan Bank Divests Rs 303.74 Crore in Stressed Housing Loans

Bandhan Bank will sell Rs 303.74 crore worth of non-performing assets (NPAs) from its housing finance portfolio. The bank's Board of Directors has approved the sale of these loans, which are over 180 days past due.

Reader Takeaway: Proactive NPA resolution is positive, but housing finance segment stress is a watch point.

What just happened

The Board of Directors of Bandhan Bank has sanctioned the sale of a portfolio of non-performing housing finance assets. The total principal outstanding on these stressed loans amounts to Rs 303.74 crore. These assets have been past due for more than 180 days.

Why this matters

This action is a strategic move by Bandhan Bank to clean up its balance sheet and improve asset quality. By divesting these long-standing NPAs, the bank aims to reduce its exposure to stressed assets and potentially recover some value.

The backstory

Bandhan Bank has been working on managing its asset quality, particularly in certain loan segments. The housing finance portfolio has shown some stress, leading to this decision to offload these specific NPA accounts.

What changes now

The bank will now initiate a Swiss Challenge bidding process to sell these NPAs to Asset Reconstruction Companies (ARCs). This method is designed to ensure competitive pricing and transparency in the disposal of stressed assets.

Risks to watch

While selling NPAs is positive, the concentration of these stressed assets in the housing finance segment warrants attention. Investors should monitor if this indicates broader issues within that sector or the bank's underwriting for housing loans.

Peer comparison

Many banks periodically undertake such NPA sales to manage their balance sheets. The effectiveness of the sale and the recovery rate will be key indicators compared to industry benchmarks.

Context metrics (time-bound)

• Principal Outstanding: Rs 303.74 Crore as of May 31, 2026.
• Status: Over 180 Days Past Due (DPD).

What to track next

Investors should monitor the progress of the Swiss Challenge bidding process, the final sale value achieved, and the impact on Bandhan Bank's overall Non-Performing Asset (NPA) ratios.