ESAF Small Finance Bank shares jump over 11%; here is why the stock zoomed

The bank said that its board has approved a proposal for the sale of non-performing assets (NPA) and written-off loans to Asset Reconstruction Company (ARC) as listed below.

• Pool size of ₹ 735.18 crore (₹ 362.43 crore NPA and ₹ 372.75 crore technically written off);

• The bank carries an overall provision of 90.15% on the above pool.

The company added that the board of directors has authorised the asset sale committee of executives to complete the procedural requirement with respect to the sale of NPA and technically written-off loans to ARC.

ESAF Small Finance Bank added that it would separately intimate as and when the aforesaid proposed deal is completed.

About ESAF Small Finance Bank

ESAF Small Finance Bank (ESAF SFB) is the new-age social bank. It primarily focuses on expanding the banking horizon to new unbanked/underbanked areas, yet "we stand as a bank for all with a presence in urban, semi-urban, rural and rural unbanked areas," as per the bank's website.

ESAF started its journey as an NGO during 1992, with a larger vision of sustainable and holistic transformation of the poor and the marginalised. The success of Grameen Bank in Bangladesh reinforced the vision of Shri K. Paul Thomas, the founder of ESAF, the bank says.

"In 1995, Thomas launched Micro Enterprises Development (MED) services, and it resulted in the formation of ESAF Microfinance and Investments Pvt. Ltd. in 2008, giving importance to the financial component in the holistic economic development of the poor and marginalised.

After evaluating the contributions and significance of ESAF in the development of rural and unreached segments of the nation, the Reserve Bank of India issued an in-principle license to ESAF Microfinance and Investments Pvt. Ltd. to set up a new Small Finance Bank during October 2015, the bank's website says.

After complying with the licensing conditions prescribed by the Reserve Bank of India and in terms of the RBI’s final license in November 2016, ESAF Small Finance Bank started the commencement of business on March 10, 2017, it says.