State-run Indian Overseas Bank (IOB) is selling bad loans of Rs 11,500 crore to asset reconstruction companies (ARCs).

 The Chennai-headquartered lender said it is selling 46 loan accounts and invited expressions of interest from the ARCs.

 The sale will be conducted through an e-auction under the open auction method on a portfolio basis, it said, adding that the portfolio comprises accounts financed under a consortium arrangement, with some admitted under NCLT.

 Prospective buyers can bid on a portfolio basis, individual accounts, or groups of accounts, it added.

 IOB managing director and chief executive Ajay Kumar Srivastava said when it comes to resolving stress, it wants to focus on value maximisation through recovery measures, including invoking SARFAESI actions, compromise settlements, and sales to ARCs.

 Eligible ARCs and other transferees can submit their EoI by January 18 to participate in the e-auction scheduled for 30 January in the case of 46 accounts.

 The bank is also considering the sale of small business and educational loan portfolios to ARCs, he said, adding that it is aligned with the strategy to enhance recovery outcomes and asset quality.

 The bank's gross NPAs had stood at 2.72% as of September, which was down from a peak of 11.69% in March 2021.