Private lender ICICI Bank on Friday announced that it has signed an agreement on March 10, 2022 for investment in National Asset Reconstruction Company Limited (NARCL) to acquire 5 per cent stake in the company. NARCL or bad bank is an asset reconstruction company, which was incorporated on July 7, 2021.
The bank will acquire up to 5 per cent equity holding in NARCL with total cash consideration of up to Rs 137.5 crore in tranches. Equity investment would be in tranches with first tranche of equity investment of Rs 70.45 crore expected to be completed by March 31, 2022, ICICI Bank said in a regulatory filing.
Shares of ICICI Bank on Friday traded 1.25 per cent higher at Rs 677.80 apiece on BSE during late trade.
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.
State Bank of India (SBI), Union Bank of India and Indian Bank have picked up 13.27 per cent stake each in NARCL. Punjab National Bank has also acquired close to 12 per cent stake in the bad bank.
Earlier, SBI Chairman Dinesh Khara had informed that NARCL has received all approvals to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore have been identified to be transferred to in it initially.
The transfer of 38 stressed accounts will happen in a phased manner, with banks agreeing to transfer 15 NPA accounts worth Rs 50,000 crore in the first phase by March 2022, Khara had said.
He had also said India Debt Resolution Company Ltd (IDRCL), which will manage the stressed assets and engage market professionals and turnaround experts, has also received all the requisite regulatory approvals.
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