The Finance Ministry on Monday said that the Rs 6,000-crore National Asset Reconstruction Company (NARCL) or bad bank is expected to take over the first set of non-performing accounts (NPAs) of banks next month.
NARCL is a special purpose asset reconstruction company for taking over the large value NPA accounts (above Rs 500 crore) from banks.
In a series of tweets, the ministry said Finance Minister Nirmala Sitharaman on Monday reviewed the progress in setting up the NARCL.
The minister was apprised of the progress achieved and took note of the approvals/permissions received for both NARCL and IDRCL from the government and regulators.
The boards of both NARCL and IDRCL, including Managing Directors (MDs), are in place.
"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," said one of the tweets.
Last month, NARCL had said Natarajan Sundar has assumed the charge of MD and CEO of the bad bank.
NARCL has shareholding from 15 Indian lenders and Canara Bank is the sponsor of this Asset Reconstruction Company (ARC).
Together with debt management company IDRCL, they are presently engaged in completing the financial and legal due diligence of the identified accounts for take over from lenders 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 accounts worth Rs 82,845 crore to be transferred to NARCL initially.
While public sector banks have taken a majority stake in NARCL, India Debt Resolution Company Ltd (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.