FM Sitharaman reviews progress in setting up of NARCL

Finance Minister Nirmala Sitharaman on Monday reviewed the progress in setting up of National Asset Reconstruction Company Ltd (NARCL). NARCL is the special purpose asset reconstruction company being set up by the government for taking over the large value NPA accounts (above Rs 500 crore) from the banks.

Sitharaman was apprised of the progress achieved and took note of the approvals and permissions received for both NARCL and India Debt Resolution Company Ltd (IDRCL) from the government and regulators.

"The boards of both #NARCL and #IDRCL, including MDs, are in place," noted the Finance Minister in a tweet.

"With the account-wise due diligence nearing completion, the first set of accounts is expected to be transferred during July 2022. The remaining accounts are proposed to be taken over within the third quarter of the current financial year," added the ministry in another tweet.

Last week, Natarajan Sundar has assumed the charge of MD and CEO of the Rs 6,000-crore bad bank. In addition, the company led by Canara Bank said that two independent directors have also joined the board.

He was chosen for the post through a competitive selection process carried out after an open advertisement. Sundar was interviewed in April 2022 by a selection panel consisting of senior bankers from both public and private sectors, NARCL had said in a statement.

NARCL has also appointed former MD and CEO of Indian Overseas Bank Karnam Sekar as the independent director and non-executive chairman of the board.

Besides, the retired executive director of RBI Malvika Sinha has also joined the board as an independent director.

In September last year, the government had announced a guarantee worth Rs 30,600 crore to security receipts issued by NARCL. The guarantee is valid for five years.

Banks have identified a total of 38 NPA (Non-Performing Asset) accounts worth Rs 82,845 crore to be transferred to NARCL 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.

(With PTI inputs)

Also read: NARCL appoints Natarajan Sundar as CEO; onboards two independent directors