India's Bandhan Bank sells stressed home loan portfolio

MUMBAI (Reuters) - India's Bandhan Bank on Thursday said that it will sell its stressed home loan portfolio to an asset reconstruction company.

The bank has approved the transfer of 7.76 billion rupees ($93.23 million) in home loans, which were overdue by more than 180 days to an asset reconstruction company (ARCs), it said in a release to exchanges.

The bank will recover 36% of this amount or 2.8 billion rupees upfront in cash as part of the sale, it said.

Banks sell assets to ARCs to help reduce the level of bad loans on their books and release the capital they need to set aside against such loans.

Bandhan Bank had a gross non-performing assets ratio of 7.32% at the end of the September 2023 quarter.

($1 = 83.2387 Indian rupees)

(Reporting by Ira Dugal; Editing by Eileen Soreng)