Bandhan Bank NPA sale: ₹303.74 crore pool in 2026

What Bandhan Bank’s board approved on June 15, 2026

Bandhan Bank’s board of directors on June 15, 2026 approved a proposal to sell a set of identified non-performing assets (NPAs) linked to the bank’s housing finance portfolio. The assets proposed for sale are accounts that are more than 180 days past due (DPD). The principal outstanding for this pool stood at ₹303.74 crore as of May 31, 2026. The bank said the sale will be carried out through a bidding process with asset reconstruction companies (ARCs). It also said the bidding will follow the Swiss Challenge method.

The update was disclosed as part of regulatory compliance and was also made available on the bank’s official website. The development put Bandhan Bank shares in focus on Tuesday, following the post-market disclosure on Monday. The bank indicated the transaction is a tool available for NPA management, rather than a recurring quarterly exercise. It added that there were no immediate plans to repeat the process as of now. The decision signals a targeted approach to managing delinquent housing finance exposures that have crossed the 180+ DPD threshold.

Scope of the portfolio being sold

The board-approved sale relates specifically to the housing finance segment. The bank described the pool as “identified NPAs” with more than 180 DPD, implying the assets have already been classified as non-performing. The principal outstanding for the identified pool is ₹303.74 crore, measured as of May 31, 2026. The bank has not described the number of borrower accounts in the pool or the geographic mix in the disclosure shared.

By moving the assets to a bidding process, the bank is effectively seeking market-based price discovery for recoveries. The approach also shifts the recovery effort to specialised entities that focus on stressed assets. In Indian banking, ARCs commonly acquire such portfolios and attempt recovery through restructuring, settlement, or enforcement. Bandhan Bank’s disclosure frames the proposed sale as an asset-quality action aligned with established mechanisms.

How the Swiss Challenge method works in such deals

Bandhan Bank said it will use the Swiss Challenge method for the sale of this NPA portfolio. In such a format, an initial bid can be used as a reference price, and other bidders are invited to better the offer within a defined process. The original bidder typically gets an option to match the best competing bid, depending on the transaction terms. The bank’s disclosure highlights this method as a way to keep the process competitive and transparent.

The bank also clarified that the sale is not positioned as a routine, every-quarter activity. Instead, it described it as an option to be considered when required for NPA management. That framing matters because it signals the bank is not committing to periodic bulk sales, but retaining flexibility to use the route when the balance between recovery outcomes and operational focus warrants it.

Why ARCs are central to bulk NPA sales

The bidding will be conducted with ARCs, which are regulated entities that buy stressed financial assets. Banks often use ARC transactions to reduce time and administrative effort involved in recoveries, and to reallocate internal resources to fresh credit and monitoring. For the buyer, the commercial logic depends on the purchase price, expected recoveries, and legal timelines.

In the disclosures provided, Bandhan Bank has pointed to competitive bidding and an organised sale route as the mechanism for this housing finance NPA pool. The bank has not provided a targeted timeline for completion of the June 2026 transaction in the shared text, but it has confirmed the process will be via bidding with ARCs.

Key facts from the June 2026 disclosure

Background: Bandhan Bank’s earlier ARC-led clean-up

Bandhan Bank has previously used ARC sales for larger stressed pools, based on the information included in the provided text. In an earlier clean-up, the bank transferred portfolios totaling ₹6,872.36 crore to ARCs for an aggregate consideration of ₹901.72 crore. The sale was executed through two separate transactions, with ARCIL acquiring an NPA pool through the Swiss Challenge method and Phoenix ARC buying a written-off pool through an auction route.

The bank had also informed exchanges that its board, at a meeting held on November 27, 2025, approved the sale of identified NPA and written-off loan portfolios via bidding with ARCs or other permitted transferees. In that disclosure, as of September 30, 2025, NPAs (180+ DPD) were ₹3,212.17 crore and written-off loans were ₹3,719.14 crore, taking the total pool to ₹6,931.31 crore. The completion update referenced a total of ₹6,872.36 crore transferred to ARCs.

Transaction details disclosed for November 2025 pools

Separate transaction details in the provided text describe a concluded sale of unsecured NPA and written-off portfolios. The unsecured NPA portfolio comprised loans more than 180 days past due, with principal outstanding of ₹3,165.25 crore as of November 30, 2025, and consideration of ₹569.75 crore on a security receipts (SR) basis from ARCIL via the Swiss Challenge method. The unsecured written-off loan portfolio had principal outstanding of ₹3,707.11 crore as of November 30, 2025, and was acquired by Phoenix ARC for ₹331.97 crore on an SR basis through an auction.

The same text notes ARCIL subscribed to 53.25% of SRs amounting to ₹303.39 crore, while Bandhan Bank subscribed to 46.75% of SRs amounting to ₹266.36 crore. These disclosures illustrate how ARC transactions can involve SR-based consideration and the bank retaining an exposure through SR holdings.

Market impact: what investors will track

The immediate market cue in the provided text is that Bandhan Bank shares were “in focus” after the board decision. Beyond that, the next set of investor questions typically centres on execution and the final recovery outcomes from the bidding process. For the June 2026 housing finance pool, the key observable facts so far are the portfolio size at ₹303.74 crore (principal outstanding) and the sale method.

Investors may also compare this housing finance sale proposal with earlier bulk-sale actions referenced in the disclosures, including the large pool transfers and the use of Swiss Challenge and auction routes. However, the bank has not provided any price expectations or timeline for this specific June 2026 housing finance transaction in the shared text. Any assessment will therefore depend on future disclosures around bids received, buyer selection, and final consideration.

Why this decision matters for asset-quality management

Bandhan Bank’s choice to pursue a Swiss Challenge sale for identified 180+ DPD housing finance NPAs reflects a structured approach to resolving long-pending delinquent accounts. Such moves can simplify recovery management by moving specific pools off the bank’s books and into specialised recovery platforms. The bank’s statement that it is not a quarterly action, and that there are no immediate plans as of now, suggests management intends to use the route selectively.

The June 2026 proposal also sits alongside earlier ARC transactions described in the provided text, where sizeable NPA and written-off pools were transferred using Swiss Challenge and auction processes. Taken together, the disclosures show the bank has experience in executing such transactions and in using SR-based consideration structures.

Conclusion

Bandhan Bank’s board has approved the sale of ₹303.74 crore in housing finance NPAs that are more than 180 days past due, as measured on May 31, 2026. The bank plans to conduct a Swiss Challenge bidding process with ARCs and has positioned the tool as an option for NPA management rather than a routine quarterly measure. The next concrete updates for investors are likely to come through subsequent regulatory disclosures as the bidding process progresses and the bank finalises the transaction terms.