Bandhan Bank Cleans Up Books with ₹303.74 Cr Housing Finance NPA Sale

The lender is offloading a stressed housing portfolio to Asset Reconstruction Companies using the Swiss Challenge method to tighten its balance sheet.

Bandhan Bank has officially set its sights on cleaning up its balance sheet, confirming the sale of a significant housing finance NPA portfolio worth ₹303.74 crore. In a regulatory filing, the bank’s board greenlit the move on June 15, 2026, targeting loans that have remained stagnant for over 180 days. This decision, disclosed in line with SEBI regulations, signals a proactive shift to tackle rising delinquencies within its housing segment.

The bank is opting for the Swiss Challenge method to conduct this sale. In this structure, the bank publishes an initial bid and then invites other potential buyers to match or better the offer. It is a calculated, transparent approach aimed at maximizing recovery value and ensuring the assets—which have been under close scrutiny—are transferred to Asset Reconstruction Companies (ARCs) at a fair market price.

Moving Past Stressed Assets

The portfolio in question carries a principal outstanding of ₹303.74 crore as of May 31, 2026. By moving these assets off its books, the bank is looking to do more than just lower its bad loan numbers. For a retail-focused lender, carrying long-term overdue housing loans can act as a drag on operational efficiency. Offloading this debt is a strategic maneuver designed to free up capital that can be redirected toward fresh, healthier lending.

Investors have been keeping a close eye on the bank’s financial health, and the recent news has kept the bandhan bank share price in active discussion across trading circles. While the sale is a necessary step for internal cleanup, market participants are watching to see how much of the principal the bank eventually recovers through the bidding process.

Why it matters

This sale is a clear indicator of the current pressure on retail lenders to maintain asset quality in a volatile credit environment. Housing finance segments have faced increased stress recently, and banks are becoming more aggressive in their recovery efforts to avoid long-term provisioning burdens. By opting for the Swiss Challenge, Bandhan Bank is essentially signaling that it prefers a market-driven discovery process over holding onto stagnant debt. If successful, this move could provide a cleaner slate for the bank's upcoming quarters, helping it shed the weight of legacy bad loans that have clouded its portfolio performance.