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Economic Times

Indian Bank to pare stake in ASREC below 30% by March 2026

Indian Bank aims to divest part of its ASREC stake to meet regulatory limits on holding in non-core businesses by end-FY26. Indian Bank plans to reduce its 38.26% stake in ASREC (India) Ltd to below 30% by FY26, in compliance with regulatory norms limiting bank exposure in non-subsidiaries. The stake is valued at ₹37.5 crore. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads State-owned Indian Bank plans to partly divest stake in asset reconstruction company ASREC (India) Ltd and has started scouting for a buyer, managing director Binod Kumar told state-owned bank holds 38.26% in ASREC. It is looking to bring down the stake to 30% by the end of this fiscal, Kumar said, even as it has received an extension of the deadline to pare stake below 30% by a year to March total value of the holding is Rs 37.5 banking law bars a bank from holding more than 30% share in any non-subsidiary company, to prevent over-concentration of risk outside its core activity, that is lending. Bank of India and Union Bank of India hold 26% each in ASREC while Life Insurance Corporation of India holds 9.18%.ASREC like any other asset reconstruction company buys non performing assets from banks and financial institutions at mutually agreed prices for resolution of the bad was incorporated in October 2004 to carry out activities under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002."The ARC will remain an attractive business even as the bad loan ratios are trending lower," Kumar said, indicating the size of non-performing assets of the banking sector as a average gross NPA for the sector stood at 2.3% of the gross advances of Rs 181.3 lakh crore at the end of June. This translates into Rs 4.2 lakh crore of NPAs even as the average ratio came down from 2.8% over the Indian Bank, the gross NPA ratio fell to 3.01% at the end of June quarter from 3.77% a year back. Its net NPA fell to 0.18% from 0.39%. Slippage ratio came down to 0.94% from 1.5% over the same period.