Kolkata: ESAF Small Finance Bank has decided to sell bad loans to the tune of Rs 1700 crore to asset reconstruction companies in an effort to clean the balance sheet.
The bad loan pool identified for the sale includes accounts that are technically written off, the bank said in a regulatory filing to stock exchanges.
The bank said it carries a 94% provision against the pool.
ESAF had gross non-performing loans of Rs 1635 crore at the end of September with the ratio being at 8.5%. Net NPA stood at Rs 696 crore which was 3.8% of the advances. Due to the asset quality stress and high credit cost, the bank suffered net losses for the five quarters in a row.
The bank’s gross advances stood at Rs 19,137 crore at the end of September.
