NARCL is being formed by all the banks whereupon some of the NPA advances will be transferred to that ARC for recovery.NARCL is constituted to be promoted by 51 per cent share from the public sector space. said PNB Managing Director S S Mallikarjuna Rao
Banks ready to transfer 37 NPAs worth ₹92,000 crore to NARCL
May 27, 2021
Banks lent to the aforementioned entities as part of a consortium - Getty Images×
Videocon, Reliance Naval, Essar Power Gujarat and Coastal Energy among others in the assets transfer list
Banks have so far zeroed-in on 37 stressed assets, with exposure aggregating to about ₹92,000 crore, that can be transferred to the National Asset Reconstruction Company Ltd (NARCL), which is being set up by lenders jointly.
The assets to be transferred to NARCL include those of Videocon Industries, Reliance Naval & Engineering, and Essar Power Gujarat and Coastal Energy, according to bankers. Banks had lent to these entities as part of a consortium.
Last year, the Indian Banks Association (IBA) had made a proposal for the creation of a bad bank for swift resolution of non-performing assets (NPAs). The government accepted the proposal and decided to go for asset reconstruction company (ARC) and asset management company (AMC) model for this.
Banks likely to transfer about 80 large NPA accounts to NARCL
Banks likely to transfer about 80 large NPA accounts to NARCL
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.