Mumbai: Bad bank in India is finally taking shape! The much-anticipated wait for the ‘Bad Bank’ finally came to end with the incorporation of the National Asset Reconstruction Company Ltd (NARCL). The company was registered with the Registrar of Companies (RoC), Mumbai with a paid up capital of Rs 74.6 crore, as per RoC filing, according to an IANS report.
- Former SBI executive Padmakumar Madhavan Nair heads NARCL as its MD and CEO, as per an IANS report.
- Indian Banks’ Association (IBA) Chief Sunil Mehta, Canara Bank’s Ajit Krishnan Nair, and SBI Deputy Managing Director Salee Sukumaran Nair are other Directors in NARCL, the IANS report says.
- With the asset reconstruction company, the government has taken a major step to clean up the banking sector, the IANS report says.
- 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 (ARC) Ltd and an Asset Management Company (AMC) 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.
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