Bandhan Bank has decided to sell off unsecured retail loans, including non-performing assets and written-off accounts. The bank sells it at Rs 7,000 crore to asset reconstruction companies and other eligible buyers. It announced in a stock exchange filing on Thursday. It is one of the largest retail-loan sales by a private-sector lender in recent times.
Bandhan Bank sells unsecured retail loans at 7k Crore
The loans for sale include about 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, according to the bank’s corporate filing. These loans mainly come from the bank’s micro-finance and small-business lending, part of its “Emerging Entrepreneurs’ Business” (EEB) and “Aspiring Business Group” (ABG) portfolios. This includes group loans, small-business loans, agricultural loans, and similar unsecured retail exposures.
To monetise this bad-loan pool, Bandhan Bank will invite bids through a structured process. The overdue NPA portion sold using the “Swiss Challenge” method, where initial binding bids are followed by counter-bids. The written-off portion offered through a direct auction.
Banks plan to clear balance sheet, and reduce asset burden
The goal behind this effort seems to be a focused attempt to clean up the bank’s balance sheet, lower its stressed-asset burden, and improve its overall asset quality. This comes amid rising stress in the micro-finance and small-business sectors, which aligns with a trend of many lenders looking to sell off stressed retail and micro-finance loan books.
Bandhan Bank has indicate that if this sale attracts strong interest and good bids from ARCs, it may consider selling more of such loan pools in the future. This suggests that this could be the first of several rounds of cleaning up stressed assets.
Read also: Uttar Pradesh and Maharashtra Restrict Aadhaar for Birth Proof