MUMBAI: Bandhan Bank on Thursday said it will sell its stressed housing finance portfolio to an asset reconstruction company in order to reduce the bad loans on its books.

The bank informed the stock exchanges that its board of directors has approved the transfer of Rs 775.72 crore in home loans, overdue by more than 180 days, to an asset reconstruction company (ARCs).

The bank will recover 36 per cent of this amount which works out to Rs 280.39 crore in hard cash as part of the sale.

Bandhan Bank had a gross non-performing assets (NPA) ratio of 7.32 per cent at the end of the July-September quarter this year.

The sale of its stressed assets will enable the bank to reduce the level of bad loans on its books and consequently it will have to set aside less money against the bad loans which can then be given out to earn interest instead.