These banks just got rid of the monkey on their backs; sold Rs 3,700 cr of bad loans

Banks are now in action mode and getting rid of the bad loans. In this regard, ICICI Bank and Axis Bank have sold Rs 3,700 crore of their bad loans to Asset Reconstruction Companies (ARCs).

Banks have become active and weeding out chunk of bad loans from their books, which will get highlighted in their September-quarter results.

ICICI Bank sold bad loans worth Rs 1,300 crore to JM Financial ARC, whereas Axis Bank transferred 26 accounts amounting to Rs 2,400 crore to Edelweiss ARC.

ET quotes sources saying the ICICI Bank sold the loans at a 50% discount and accepted 15% cash and the balance 85% as security receipts.
Axis Bank got rid of its biggest account in bad loans- Essar Steel-and sold to Edelweiss ARC.

"SBI has not sold all the accounts yet due to difference on the valuation. Negotiations are on for 3-4 accounts with Rs 900 crore outstanding loans. These include Maitreya Doshi-promoted Premier and Paramount Communications," a senior industry official told ET.

Last year, ICICI Bank sold just seven accounts with outstanding loan of Rs 670 crore. The net NPA of ICICI Bank was 3% at the end of June 2016, while that of Axis Bank was 1.08%.