SBI puts ₹47-crore stressed loan portfolio on the block

State Bank of India (SBI) has put stressed loans with a combined principal outstanding of ₹47.16 crore up for sale. It is inviting expressions of interest (EoI) from asset reconstruction companies (ARCs), banks, non-banking financial companies (NBFCs), financial institutions and other permitted transferees.

The sale covers one account with fund-based principal outstanding of ₹10.42 crore and a pool of 17 accounts with fund-based principal outstanding of ₹36.74 crore. The details are in a public notice from the bank’s Stressed Assets Resolution Group, published on Thursday. On average, each account in the pool carries about ₹2.16 crore of principal.

The loans will be sold by e-auction on an “as is where is”, “as is what is”, “whatever there is” and “without recourse” basis. In practice, the buyer takes on all the risk of recovery and has no claim against SBI if the assets bring in less than the price paid.

The notice does not name the borrowers or their sectors. It also gives no reserve price or auction date. Interested bidders must sign a non-disclosure agreement before they can see account-level information. Bidders who have not yet signed one have been told to contact the bank’s deputy general manager at dgm.sr@sbi.co.in.

SBI said it reserves the right to call off the e-auction, or to change its date or any of its terms, at any stage without giving reasons. Any change will be posted as a corrigendum on its website, and the bank said its decision will be final and binding. The notice was issued by the bank’s Deputy General Manager (Credit & ARC) and is dated 22 October.

Under the Reserve Bank of India’s framework for transferring loan exposures, lenders can sell stressed loans to ARCs and other permitted transferees through a transparent, market-based process, usually an auction. Such sales let banks take bad loans off their books and free up recovery teams for larger cases, but they often mean a haircut on the amount owed.

Banks normally run these sales in stages. They call for EoIs, sign confidentiality agreements with interested parties, open a data room for due diligence and then hold the e-auction. A bidder can also make an offer first and have it tested against counter-bids under the Swiss challenge method.

At ₹47.16 crore, this is a small transaction for the country’s largest lender. Its structure, a single account plus a pool of mid-sized exposures, suggests SBI is clearing smaller stressed accounts in bulk rather than resolving them one by one.

Also See: Sammaan Capital, subsidiary put stressed loans on the block again, six months after ₹5,000-crore Arcil sale