Finance Minister Nirmala Sitharaman held a media briefing on ThursdayFinance Minister Nirmala Sitharaman held a media briefing on Thursday where she made an announcement on the much-awaited bad bank. She said the Union Cabinet has approved a proposal to provide Rs 30,600 crore government guarantee for security receipts issued by the National Asset Reconstruction Company (NARCL) to resolve the issue of bad loans.
The Union Cabinet had reportedly approved the proposal to set up a bad bank on Wednesday. FM Sitharaman had in her Budget 2021-22 speech announced the creation of the National Asset Reconstruction Company Ltd (NARCL) or bad bank to consolidate and take over the stressed debt of banks.
Follow BusinessToday.In for all the latest updates on FM Sitharmana's live press conference:-
5.40 PM: Why 5-year time frame for Rs 30,600 cr gurantee for bad bank?
"Because we expect to clear it in five years; idea is to ensure value locked within assets is used making banking system robust So limit provides an incentive for banks If process delayed beyond five years, guarantee can't be invoked," says FM Sitharaman.
5.39 PM: FM Sitharaman on NARCL
"Through setting up of NARCL and various other steps taken in recent years, we have in totality addressed the issues facing Indian banking sector, which was in 2015 staring at us with twin balance sheet problem, We now have a way of resolving the stressed assets," said FM Sitharaman.
5.35 PM: FM announces outlay for bad bank
"Along with National Asset Reconstruction Company Ltd, we are also setting up an India Debt Resolution Company Limited. PSBs will have 51% ownership in NARCL, while PSBs and public financial institutions will have a maximum of 49% stake," said Finance Minister Nirmala Sitharaman.
5.29 PM: Big frauds to the tune of Rs 100 crore or more have an average lag duration of 57 months for fraud detection, said FM Sitharaman. She added that the Fugitive Economic Offenders Act of 2018 is demonstrating a lot of results.
5.27 PM: "Union Budget announced the intent to set up an ARC-AMC to takeover existing debt, manage and dispose them of to buyers to realise the value of the stressed assets," FM Sitharaman announced.
5.23 PM: Banks reported large recoveries of bad loans post the asset quality review of 2015, says FM Sitharaman.
5.19 PM: Of Rs 5,01,479 crore recovered by banks during last six years, Rs 3.1 lakh crore has been recovered since March 2018, said. She added that in 2018-19 alone, a record Rs 1.2 lakh crore were recovered.
5.13 PM: High incidence of NPAs, says FM
Finance Minister Nirmala Sitharaman said on Thursday that banks' asset quality review took place in 2015, for cleaning up and fully provisioning bank balance sheets. This, she said, disclosed very high incidence of NPAs (non-performing assets).
5.05 PM: Rs 30,600 cr gurantee for bad bank approves, announces FM
The Union Cabinet had on September 15 approved Central Government guarantee up to Rs. 30,600 Crore to back Security Receipts to be issued by National Asset Reconstruction Company Limited (NARCL), FM Sitharaman announced.
5.01 PM: Cabinet paves the way for the operationalisation of the National Asset Reconstruction Company or the 'bad bank': FM Sitharaman
