Bank of Maharashtra to auction Rs 500 cr NPAs in September

Kolkata: State-owned Bank of Maharashtra is looking to sell stressed assets worth Rs 500 crore in an auction in September.

“We are putting up loans worth Rs 500 crore for auctions in September. If that is successful then we might sell another Rs 1,000-1,500 crore bad loans to ARCs in the second half of the fiscal,” said the bank’s chairman and managing director Sushil Muhnot.

Speaking at a Ficci-organised Banking Conclave, he said Bank of Maharashtra will also e-auction 136 real estate assets held as collateral in September.

Muhnot said the state-run lender is also looking to contain the slippages to improve its asset quality going forward.

“Our primary focus is containing the slippages. In the first quarter slippages were higher, mainly due to deteriorating asset quality in SME (small and medium enterprises) portfolio,” he said.

Meanwhile, the bank will receive Rs 394 crore from the government in the current financial year which will help it shore up its capital adequacy ratio.

“We have asked for Rs 400 crore but the government has agreed to provide Rs 394 crore. This will help us improve capital adequacy ratio as per Basel III norms to around 12 percent,” he said.

As on 30 June, the bank’s capital adequacy ratio as per Basel III norms stood at 11.61 percent.

The bank is eyeing a 12 percent year-on-year rise in advances and 14-15 percent rise in deposits in the current financial year, he added.

PTI