Image Source: Business Standard
ESAF Small Finance Bank Ltd has approved the sale of non-performing and written-off loans worth up to ₹17 billion to an Asset Reconstruction Company (ARC). The move aims to streamline its balance sheet, recover stressed assets, and strengthen capital efficiency ahead of the next growth phase in its lending operations.
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ESAF Small Finance Bank, a leading regional small finance lender, has announced approval for the sale of stressed assets — including non-performing and written-off loans amounting to ₹17 billion — to an Asset Reconstruction Company (ARC). The strategic decision is part of the bank’s ongoing efforts to improve asset quality and reduce NPAs.
Key Highlights
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Transaction Size: Sale involves bad loans and written-off exposures up to ₹17 billion.
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ARC Route: Assets will be transferred to an Asset Reconstruction Company under RBI’s guidelines for distressed asset resolution.
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Balance Sheet Cleanup: Move aligns with ESAF’s plan to strengthen asset quality metrics and recover locked capital.
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Strategic Focus: The bank is prioritizing portfolio realignment and risk reduction across its microfinance and retail lending segments.
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Management View: ESAF said the sale would improve financial resilience and pave the way for fresh lending growth in FY26.
Source: Company disclosure via BSE exchange filing
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