SBI, Union Bank to go ahead with Swiss Challenge auction for KSK Mahanadi Power loans : Rashtra News
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In the Swiss auction process, lenders first hold an auction of the NPA, and the offer made by the highest bidder (also known as anchor bidder) is set as the reserve price. Subsequently, they hold yet another auction, inviting bids at higher than reserve price, but the anchor bidder will get an opportunity to match the best bid.
SBI and Union Bank have invited bids for ₹4,101 crore and ₹1,773 crore respectively from ARCs, which is the largest auction of single loan till date.
Four ARCs – Omkara ARC, CFM ARC, Rare ARC and Invent ARC – were raided on December 8 by income tax department which claimed that the Swiss challenge method for selling loans is opaque in nature and that defaulting borrowers can regain control of their companies by funding the ARC using the hawala route, ET reported.
Several commercial banks that spoke with ET disagreed with the allegations raised by the income tax department but declined to be named on apprehensions of being questioned by investigative agencies. Officials from the ARC industry too declined to comment on record.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a economictimes.indiatimes.com feed.)
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