One of the reasons public sector banks might be indulging in distress sales, is probably corruption: Politically connected owners/managers of NPAs (most of them are -- they would never have gotten a loan from a bank in India otherwise) collude with politicians to sell the asset at a ridiculously low price. These owners then team up with international private-equity to then scoop up the assets at a fraction of the price and regain full control with all the losses being borne by the Indian govt. (and through it the Indian taxpayer) and other domestic creditors. Nice deal, if you can get it. And if I were a Private Equity investor abroad, I'd get excited by the deal too.