SME Times News Bureau | 13 Jul, 2021
The long-standing wait for India's "bad bank" has come
to an end with the incorporation of the National Asset Reconstruction
Company Ltd (NARCL).
The company has been registered with the
Registrar of Companies (RoC), Mumbai with a paid up capital of Rs 74.6
crore, as per RoC filing.
NARCL is headed by Padmakumar Madhavan
Nair, a former SBI executive, as its MD and CEO. The other directors
include SBI Deputy Managing Director Salee Sukumaran Nair, Canara Bank's
Ajit Krishnan Nair and Indian Banks' Association (IBA) chief Sunil
Mehta.
The asset reconstruction company is a major move by the government in its move to clean up the banking sector.
Amid
concerns of rise in non-performing assets in banks due to the pandemic,
the government decided to come up with a bad bank to take over the
stressed assets of the lenders.
Presenting the Union Budget for
2021-22, Finance Minister Nirmala Sitharaman had said that an Asset
Reconstruction Company Ltd and an Asset Management Company will be set
up to consolidate and take over the existing stressed debt.
The
ARC and AMC will then manage and dispose of the assets to Alternate
Investment Funds and other potential investors for eventual value
realisation.
Sitharaman had said that the high-level of
provisioning by public sector banks of their stressed assets calls for
measures to clean up the bank books.
