Received all approvals to set up bad bank: SBI chairman Dinesh Khara
Khara said the NARCL or bad bank and India Debt Resolution Company Ltd (IDRCL) are ready to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore have been identified to be transferred.
- Jan 28, 2022,
- Updated Jan 28, 2022 6:00 PM IST
The State Bank of India (SBI) chairman Dinesh Kumar Khara today announced that all approvals for setting up of a bad bank have been received from the government, paving the way for its formation. Speaking in a press meeting, Khara said the National Asset Reconstruction Company (NARCL) or bad bank and India Debt Resolution Company Ltd (IDRCL) are ready to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore have been identified to be transferred to NARCL initially.
He also said IDRCL, which will manage the stressed assets and engage market professionals and turnaround experts, has also received all the requisite regulatory approvals.
Khara said the transfer of 38 accounts will happen in a phased manner, and in the phase one 15 accounts worth Rs 50,000 crore will be transferred to NARCL in the current financial year.
''In the phase one, about 15 accounts aggregating to Rs 50,000 crore are expected to be transferred to the NARCL. We are trying to have these accounts transferred within this financial year after completing all the required processes,'' Khara told reporters.
He said while public sector banks have taken a majority stake in NARCL, IDRCL will be majorly owned by private sector banks.
SBI, Union Bank of India and Indian Bank have picked up 13.27 per cent stake each in NARCL. Punjab National Bank has acquired close to 12 per cent stake in the bad bank.
Explaining the arrangement, Khara said that NARCL will acquire and aggregate the identified NPA accounts from the banks, while IDRCL, under an exclusive arrangement, will handle the debt resolution process.
This exclusive arrangement will be as per the scope defined in the debt management agreement being executed between the two entities, he said.
The arrangement will be on principal-agent basis and final approval and ownership for the resolution will lie with the NARCL as the principal, he added.
Finance Minister Nirmala Sitharaman in her Budget 2021-22 speech had announced that the government intends to set up a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore in the banking system.
In September last year, the government had announced to provide guarantee worth Rs 30,600 crore to security receipts issued by NARCL. The guarantee is valid for five years.
(With inputs from PTI)
The State Bank of India (SBI) chairman Dinesh Kumar Khara today announced that all approvals for setting up of a bad bank have been received from the government, paving the way for its formation. Speaking in a press meeting, Khara said the National Asset Reconstruction Company (NARCL) or bad bank and India Debt Resolution Company Ltd (IDRCL) are ready to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore have been identified to be transferred to NARCL initially.
He also said IDRCL, which will manage the stressed assets and engage market professionals and turnaround experts, has also received all the requisite regulatory approvals.
Khara said the transfer of 38 accounts will happen in a phased manner, and in the phase one 15 accounts worth Rs 50,000 crore will be transferred to NARCL in the current financial year.
''In the phase one, about 15 accounts aggregating to Rs 50,000 crore are expected to be transferred to the NARCL. We are trying to have these accounts transferred within this financial year after completing all the required processes,'' Khara told reporters.
He said while public sector banks have taken a majority stake in NARCL, IDRCL will be majorly owned by private sector banks.
SBI, Union Bank of India and Indian Bank have picked up 13.27 per cent stake each in NARCL. Punjab National Bank has acquired close to 12 per cent stake in the bad bank.
Explaining the arrangement, Khara said that NARCL will acquire and aggregate the identified NPA accounts from the banks, while IDRCL, under an exclusive arrangement, will handle the debt resolution process.
This exclusive arrangement will be as per the scope defined in the debt management agreement being executed between the two entities, he said.
The arrangement will be on principal-agent basis and final approval and ownership for the resolution will lie with the NARCL as the principal, he added.
Finance Minister Nirmala Sitharaman in her Budget 2021-22 speech had announced that the government intends to set up a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore in the banking system.
In September last year, the government had announced to provide guarantee worth Rs 30,600 crore to security receipts issued by NARCL. The guarantee is valid for five years.
(With inputs from PTI)