Athira Sethu
Kochi, 29 Dec 2025
Kolkata-based Bandhan Bank has plans to sell its non-performing loans worth Rs 6,932 crore. There have been issues related to the quality of loans, which has impacted the profit of the bank. In order to overcome such issues, the bank has chosen to sell their loans which have become due for more than 180 days and has also decided to auction loans which have become written off.
The types of loans being sold are largely comprised of micro loans, including group and individual loans, and agricultural loans. Over 45% of the loans offered by Bandhan Bank are unsecured, meaning that these loans are not collateralized or secured with property or assets. The above has resulted in a stressed financial position, and this impacts the cost of borrowing and profitability.
The bank will sell its loans worth Rs 3,212 crore that are due for more than six months. These loans will be sold to the tenderer in accordance with the ‘Swiss challenge method,’ which is the process of loan auctions. The bank will conduct the loan auctions of another set of its loans that are written off, which as of September 30 totals to Rs 3,719 crores. All this has been disclosed in the bank’s report to the stock exchanges.
As of the end of September, the total stressed lending by Bandhan Bank, originating from its micro finance and agricultural loan operations, stood at Rs. 5,860 crore. This is approximately 4.2% of the total assets, which are valued at Rs. 1.4 lakh crore. However, the total non-performing loans in the above sectors were at Rs. 4,940 crore. In this context, the total written-off loans are not to be considered as stressed.
The total bad loans of the bank, also known as the Non-Performing Assets or NPA, have risen to Rs 7,020 crore. This is comprised of housing loans of Rs 910 crore, wholesale loans of Rs 870 crore, and retail loans of Rs 300 crore. The NPA ratio of the bank has risen to 5%, which is substantial. This is also the reason for the credit cost rising to 3.4% in the current quarter, up from 2% in the same quarter last year. This resulted in the profit of Bandhan Bank plummeting to 88% to touch only Rs 114 crore, down from last year’s figure of Rs 937 crore. It is expected that, by unloading these non-performing loans, the bank will be able to relieve its balance sheet and reduce stress.
