NEW DELHI: Banks are likely to transfer about 80 large NPA accounts for the resolution to National Asset Reconstruction Company Ltd (NARCL), which is expected to be operational by next month.
NARCL is the name coined for the bad bank announced in the Budget 2021-22. A bad bank refers to a financial institution that takes over the bad assets of lenders and undertakes resolution.
The size of each of these NPAs accounts is over Rs 500 crore and the banks have identified about 70-80 such accounts to be transferred to the proposed bad bank, sources said.
It is expected that NPAs over Rs 2 lakh crore will move out of the books of the banks to the bad bank, they added.
SBIâs P Madhavan Nair named CEO of Bad Bank: Report
Representational Image/ Pexels
Things around Bad Bank or say National Asset Reconstruction Company Limited (NARCL) have started to move. According to Moneycontrol, State Bank of India (SBI) Padmakumar Madhavan Nair has been named the Chief Executive Officer (CEO) of the NARCL.
Currently, Nair is the Chief General Manager of Stressed Assets Resolution Group, SBI. According to the report, he has been in charge of this department for the last few years and has experience in stressed assets management for many years.
He has served as the Senior Vice President at SBI Capital Markets as well. For over a year, he held the position of CEO at SBI in Los Angeles. Nair has been with Indiaâs largest lender and its subsidiaries for over two decades.
Bad bank refers to a financial institution that takes over bad assets of lenders and undertakes resolution. The new entity is being created in collaboration with both public and private sector banks, Indian Banks Association Chief Executive Officer (CEO) Sunil Mehta told PTI. Various preparatory work is going on and we hope that it should be operational next month. The biggest advantage of NARCL would be aggregation of identified NPAs (non-performing assets). This is expected to be more efficient in recovery as it will step into the shoes of multiple lenders who currently have different compulsions when it comes to resolving a bad loan, he said.
RBI forms panel to review ARCs, mould them to suit financial sector needs
The committee will review existing legal and regulatory framework applicable to ARCs and recommend measures to improve their efficacy, and their role in resolving stressed assets
BusinessToday.In | April 20, 2021 | Updated 00:48 IST
The Reserve Bank of India has formed a committee to review the way asset reconstruction companies (ARCs) function in the financial sector and recommend measures to reform them according to the growing requirements of the financial sector. RBI Governor Shaktikanta Das had announced after the monetary policy committee meeting earlier this month that such a panel was in the work.
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