Even as the public sector banks have made a beeline to dispose of their bad loans to the asset reconstruction companies (ARCs) in the March quarter, private banks are not only unenthused in adopting this route, but have virtually shunned this.
State-run banks, which are sitting on a mountain of bad loans, have sold as much as over Rs 10,000 crore to ARCs in the March quarter, led by State Bank’s close to Rs 4,000 crore asset sale, a first for the nation’s largest lender in its over 200-year history. In the December quarter, SBI had reported a gross NPA of 5.3 per cent or Rs 67,800 crore.
As against this, its largest private sector counterpart ICICI Bank had a gross NPA ratio of 3.03 per cent in the three months to March, but sold not a single penny to ARCs, its managing director and chief executive Chanda Kochhar said.
HDFC Bank deputy managing director Paresh Sukthankar said the bank’s sale to ARCs was around Rs 6 crore, which is “nothing meaningful”, while Yes Bank sold Rs 12 crore. For Axis Bank, the third largest private sector lender, the sale to ARCs during the March period, which generally witnesses such sales, was minimal, according to its management.
In stark contrast, the state-run lenders have reportedly sold over Rs 10,000 crore of assets to the ARCs in March alone, due to a variety of reasons, including a push by their majority owners.