PNB Auctions ₹760 Cr Bad Loans, Targets Gammon India

BANKINGFINANCE

Overview

Punjab National Bank is again selling over ₹760 crore in non-performing assets. Major accounts include Gammon India and Simbhaoli Sugars. This follows a significant ₹2,500 crore sale attempt last week, signaling a push to clear stressed corporate loan books.

Punjab National Bank (PNB) has initiated another sale of non-performing loans, this time totaling more than ₹760 crore. Bid documents indicate prominent accounts such as Gammon India, with ₹514 crore in bad debt, and Simbhaoli Sugars, owing ₹226 crore, are part of this offering.

Stressed Asset Disposal

The lender is also seeking buyers for ₹94 crore in loans to Ranchi Expressways and smaller exposures to Shree Basaveshwar Sugars and others. This move comes shortly after PNB's attempt to offload ₹2,500 crore in loans last week, signaling a determined effort to reduce its non-performing asset portfolio.

Shift in Strategy

This renewed focus on selling corporate loan accounts is notable. Banks have predominantly concentrated on offloading retail and microfinance portfolios in recent times. PNB's strategy appears to involve addressing larger corporate exposures directly.

Recovery Expectations

Previously, PNB's Managing Director and CEO, Ashok Chandra, had stated the bank identified over 100 non-performing accounts valued between ₹4,000-5,000 crore for sale to asset reconstruction companies. Chandra had projected recovery rates of at least 40-50% from these sales.

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