Indian Bank Sells MVR Bad Loans To Arcil For Rs 180 Cr

CHENNAI: After years of struggle to recover loans it gave to troubled and controversial MVR Group which is engaged in cashew exports, Indian Bank has sold the non-performing assets (NPAs) to Arcil, an asset reconstruction company (ARC), for Rs 180 crore, sources said.

The loans were given to various companies of MVR Group in the late eighties and early nineties. These, along with similar lending, turned as bad loans and caused much headache to the bank forcing it to report a huge loss of over Rs 1,300 crore in 1996-97.

While the exact principal amount it gave to MVR Group could not be ascertained, the amount the group owes to the bank, including interest, is over Rs 1,000 crore, a senior bank official told ET. This is an independent deal, outside the Rs 1,700 crore of NPAs it plans to sell off to ARCs, he said.

A couple of years ago, the bank considered making some recovery by selling about 30 grounds owned by MVR Industries in Guindy. If the sale had gone through, the bank would probably have realised considerable sum. But there were court injunctions related to the title and other problems as well, the official said. Selling off such loans to asset reconstruction companies was made possible because of a change in legislation in 2002.