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NESFB offloads stressed micro-loans of Rs.535-Cr to Edelweiss ARC

Business Standard  

Guwahati-based North East Small Finance Bank (NESFB) has sold stressed loans in its microfinance portfolio of over INR 500 crore to Edelweiss Asset Reconstruction Company (ARC) as a step to clean up its books and release capital ahead of a proposed merger with Fintech startup Slice. Even after the sale of stressed assets, the bank's capital adequacy ratio remains below the regulatory requirement of 15%, mandated for small finance banks.The bank sold its entire stressed loan portfolio of INR 535.23 crore (excluding technical write-offs) to Edelweiss ARC for INR 150 crore and subscribed to investment in security receipts of INR 127.4 crore issued by the ARC.NESFB is in the process of raising INR 200 crore in the current financial year. This capital infusion is expected to meet capital adequacy norms and create a base for further rounds of capital infusion.