Bandhan’s bad loan sale draws ARC interest

Bandhan Bank’s nearly %7,000-crore microfinance bad loan portfolio sale — one of the largest such sales by a private sector bank — has attracted significant interest from asset reconstruction companies (ARCs).

- SUBRATA PANDA

Industry insiders say that given the large number of accounts in the microfinance portfolio and the current stress in the sector, it could be a good buy for ARCs at the right price. Typically, large microfinance portfolios are sold for less than 10 cents on the dollar, industry insiders said.

“There is some interest from the industry,” said the chief of a large ARC, adding that while it has evinced interest, it will all depend on the pricing.

Given that its mostly microfinance portfolios involve millions of accounts, the due diligence is difficult, and so is recovery, he added.