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So far, NARCL has taken over approximately Rs 88,000 crore of banks’ stressed assets and is doing due diligence for another Rs 60,000 crore, Joshi said
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The twin structure of state-owned NARCL and its private sector resolution agent IDRCL is not cohesive. Difference between the two, including a power tussle, mars the overall recovery process
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The growth in India's aviation sector over the last nine years has not been a cakewalk. As many as four ministers have led the Ministry of Civil Aviation and three airlines have nearly collapsed during the period
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A round-up of top stories from newspapers to keep you ahead of others.
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NARCL is a special purpose asset reconstruction company for taking over the large value NPA accounts (above Rs 500 crore) from banks.
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From PM Jan Dhan Yojana that promised to end ‘financial untouchability’ to the Goods and Services Tax regime, the Narendra Modi government has brought about several economic reforms through a mix of legislative and policy changes.
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The lender on April 30 reported its January-March net profit at Rs 367 crore as against a loss of Rs 3,788 crore in the same period last year. This was led by lower provisions, higher net interest income and an improvement in asset quality.
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In January 2022, State Bank of India (SBI) chairman Dinesh Khara had said that the National Asset Reconstruction Company (NARCL) received all approvals to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore were identified to be transferred to the bad bank in a phased manner.
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Before this round of preferential allotment, BoB held a 13.27 percent stake in NARCL. The same has now been reduced to 9.90 percent, the bank told the stock exchanges
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The NARCL strategy resembles trying to use a band-aid to staunch a deep flesh wound; it may work for only a short period and is, at best, a sub-optimal locum for the actual procedure
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The Bad Bank will absorb bad assets from banks but proper execution and asset resolution will be key to make sure the project doesn’t meet the fate of some of the earlier initiatives.
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It’s not just the organizational structure and regulatory concerns. The proposed Bad Bank may also encounter valuation hurdles in a tough market.
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NARCL will acquire stressed assets of about Rs 2 lakh crore in a phased manner. The stressed assets will be acquired through a 15 percent upfront cash payment and 85 percent in the form of security receipts.
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In today’s edition of Moneycontrol Pro Panorama: All-out war on NPAs, state of the economy, Weekly Tactical, the disinvestment clock, why Zomato should spill the beans, rate hike pot boils and more
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India’s primary experience with asset reconstruction companies (ARCs) has not been great. Government guarantee, however, could be a game changer
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The price at which the asset transfer happens will be key. Banks will have to invest around Rs 5,000- Rs 6,000 crore in the NARCL which is approximately what they are likely to get back with the 15 percent upfront cash transfer during asset transfer. Rest will depend on a resolution within five years. That’s the trickiest part.
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Plugging the long-standing gap between policy intent and action, the government has displayed a firm resolve to expedite the recovery process of the banking sector
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The larger issue now is the efficacy of the NARCL and its ability to resolve assets. So far, there is no convincing record of effective resolution, and none of the parameters and timetables under regulations have performed
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Finance Minister Nirmala Sitharaman may announce the govt guarantee on securities receipts. The Union Cabinet is learnt to have approved the proposal to formalise sovereign backing for the securities receipts issued by the National Asset Reconstruction Company Ltd.
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Clear statutory backing, clarity of objectives and an independent and professional management are key to the success of a bad bank. These components seem absent in the current structure.
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The National Asset Reconstruction Company will have nominee directors from other banks once it receives the necessary clearances from the central bank.
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Following the board nod, Canara Bank said, the bank has sought the approval from the Reserve Bank of India for participating in NARCL as sponsor contributing 12 per cent stake.
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The figures are based on preliminary estimates and what the company buys will ultimately depend on its own appetite, Rai said.
