Kolkata, Aug 19 (IANS): Bank of Maharashtra on Wednesday said it is planning to sell nearly Rs.500 crore of its bad loans to asset reconstruction companies (ARC) by the end of September this year.

"By September, we have planned to sell Rs.500 crore of our non-performing assets (NPA) to ARCs and we need to be more aggressive on this," the bank's chairman and managing director Sushil Muhnot told media persons here on the sidelines of the FICCI Banking Conclave.

A non-performing asset does not yield any income to the lender in the form of principal and interest payments.

While the amount to be sold will fall under the first tranche of the bank's NPA sales, it has targeted shedding of another Rs.1,000-1,500 crore of these in the ongoing fiscal year.

"However, it (total NPA sales) will depend on the success of the sales as projected in September," the official said.

In case the bank is unable to meet its Rs.500 crore NPA sales target, the second tranche will also hover around Rs.500 crore, Muhnot said.

The public sector lender had sold Rs.200 crore of NPAs during 2014-15.

In the bank, the gross past dues of loans in the first quarter of the current fiscal year stood at 7.86 percent at Rs.7,574.86 crore. However, in case the financial institution is able to meet the target, the loans facing jeopardy of default may decline to 5.5-6 percent.

Muhnot is hoping to grow the bank's advances business by 12 percent and the deposits business by 14-15 percent in 2015-16.