In a bid to cleanup its books, Bank of India (BOI) will sell 50 corporate non-performing assets (NPAs) with Rs 5,557 crores outstanding, Business Standard has reported. The bank’s bad loans will be sold to asset reconstruction companies (ARCs) on 100 per cent cash basis only as per the report. The bank aims to complete the sale before September to get the benefit of better recoveries in the second quarter of the current financial year.
The bank is being monitored under Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework because of its high percentage of NPAs. While the banks are undergoing a turnaround plan under PCA, restrictions are placed on the bank’s lending activities. Gross NPAs of the bank have reduced from Rs 62,328 crore in March quarter to Rs 60,604 crore in the June quarter. However, the gross NPA ratio went up from 16.58 per cent in March quarter to 16.66 per cent in June quarter due to drop in loans disbursed by the bank.
The bank posted a profit of Rs 95 crore in first quarter of financial year 2018-19 in comparison to Rs 88 crore profit in the same quarter last year. Rating agency ICRA has said that the bank’s profitability would remain weak due to high level of NPAs and stressed assets.