Kotak Mahindra Bank (KMB) said on Tuesday it has acquired the business loan portfolio of Barclays Bank in India. KMB will gain 6,000 business loan customers, with a total loan outstanding of about Rs 700 crore, the bank said in a statement.
?The strategic intent behind this acquisition is to further grow our business loans portfolio for chosen client segments. We have an appetite for further acquisition which can strategically create value for us and will actively seek such opportunities,? Paul Parambi, head of group strategy, KMB.
The loans acquired by KMB is classified as ?standard loan? as per current Reserve Bank of India guidelines, the bank said. The private sector lender?s in-house asset reconstruction team will be responsible for recovering the dues from these accounts.
The deal value was not immediately known, but banks in India have to follow RBI?s guidelines on valuation of stressed asset sale. According to RBI guidelines released in October 2007, while selling non-performing assets, banks have to work out the net present value of the estimated cash flow associated with the realisable value of the available securities net of the cost of realisation. The sale price, generally, should not be lower than the net present value.
