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Business News/ Companies / People/  Dena Bank plans lower price to sell around Rs500 crore NPAs
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Dena Bank plans lower price to sell around Rs500 crore NPAs

From these the bank could sell around `30 crore of loans in the auction

A file photo of Dena Bank’s corporate office in Mumbai. Photo: MintPremium
A file photo of Dena Bank’s corporate office in Mumbai. Photo: Mint

Mumbai: State-run lender Dena Bank, which did not receive good response for its non-performing assets (NPA) sale last fiscal, is now planning to auction again but at a lower price.

The bank, which is still fighting high bad loans, had put on auction 400-500 crore of stressed assets in the last quarter for asset reconstruction companies (ARCs). “We had put on auction our NPAs but were able to sell very minimal amount of bad loans as the prices offered to us were much lower than our reserve price," a senior bank official told PTI.

Out of the 400-500 crore of NPAs, the bank could sell around 30 crore of loans in the auction, he said, adding the bank is looking at remaining assets put on block for sale.

The official said the bank will now again try to sell those bad loans by revising the price. “We would again put on auction the balance NPAs and will also lower the reserve price," he said.

It could be noted that last August the Reserve Bank had made norms tighter for asset reconstruction companies by asking them to pay upfront 15% of the bid value of non-performing loans, against 5% earlier.

Following this, ARCs were going slow in distressed asset purchases. Analysts say the RBI regulation has resulted in sharp fall in sale of bad loans by banks to ARCs as they are demanding lower price. As of December 2014, the mid-sized lender’s gross non-performing assets stood at 5.61%, while net NPA was at 3.97%.

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Published: 05 Apr 2015, 07:42 PM IST
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