SBI to auction 8 bad loan accounts to recover Rs 3,900 cr

State Bank of India (SBI) has put eight non-performing asset (NPA) accounts with a combined outstanding amount of more than Rs 3,900 crore on the block as part of its efforts to recover dues and reduce its bad-loan burden.

The country's largest lender has invited asset reconstruction companies (ARCs), banks, non-banking financial companies (NBFCs) and other financial institutions to participate in the sale. The e-bidding process is scheduled to take place on September 26.

In a notification issued last week, SBI asked prospective buyers to conduct due diligence on the accounts before submitting their expressions of interest for the auction.

According to the bank's bid document, the sale is being carried out under its revised policy for the sale of financial assets and in accordance with regulatory guidelines.

Rohit Ferro Tech has the largest outstanding amount among the accounts put up for sale, with dues of Rs 1,320.37 crore. It is followed by Indian Steel Corporation with Rs 928.97 crore and Jai Balaji Industries with Rs 859.33 crore.

The other accounts include Mahalaxmi TMT, with outstanding dues of Rs 409.78 crore; Impex Ferro Tech, Rs 200.67 crore; Kohinoor Steel, Rs 110.17 crore; Modern India Concast, Rs 71.16 crore; and Ballarpur Industries, Rs 47.17 crore.

The sale is part of a broader effort by banks to clean up their balance sheets by transferring stressed assets to specialised buyers. ARCs can acquire such loans and attempt to recover the outstanding amounts through restructuring, asset sales or other resolution mechanisms.

The move comes against the backdrop of a severe bad-loan problem in India's banking sector. Gross NPAs across the banking system had reached around Rs 10 lakh crore, while SBI alone had more than Rs 2 lakh crore in gross bad loans at the end of June.

SBI's financial performance has also been affected by the high level of stressed assets. The bank reported a loss of Rs 4,876 crore for the quarter ended June, largely due to provisions made against NPAs.

The auction of these eight accounts highlights the continuing pressure on lenders to recover funds locked in stressed corporate loans and strengthen their balance sheets amid efforts to address India's broader banking-sector bad-loan crisis.