First batch of non-performing assets will be transferred to bad bank in July: Finance Ministry

New Delhi:

The Ministry of Finance said on Monday that the National Asset Reconstruction Company (NARCL) or Rs 6,000 crore bad bank is expected to take over the first set of non-performing accounts (NPA) from banks next month.

NARCL is a special purpose asset reconstruction company for the recovery of high value NPA accounts (above Rs 500 crore) from banks.

In a series of tweets, the ministry said on Monday that Finance Minister Nirmala Sitharaman had reviewed the progress made in setting up the NARCL.

The Minister was briefed on the progress made and took note of the approvals/permissions received for NARCL and IDRCL from the government and regulators.

NARCL and IDRCL Boards of Directors including Chief Executive Officers (MDs) are in place.

“With due account verification nearing completion, the first set of accounts is expected to be transferred in July 2022. It is proposed to take over the remaining accounts in the third quarter of the current fiscal year,” one of the tweets said. . .

Last month, NARCL said that Natarajan Sundar had assumed the charge of MD and CEO of the bad bank.

NARCL owns shares of 15 Indian lenders and Canara Bank is the sponsor of this asset reconstruction company (ARC).

Together with the debt management company IDRCL, they are currently engaged in completing the financial and legal due diligence of accounts identified for takeover from lenders. In September last year, the government announced a guarantee worth Rs 30,600 crore to security receipts issued by NARCL. The warranty is valid for five years.

The banks have identified a total of 38 NPA accounts worth Rs 82,845 crore to be initially transferred to NARCL.

While public sector banks have taken a majority stake in NARCL, India Debt Resolution Company Ltd (IDRCL) will be majority owned by private sector banks. SBI, Union Bank of India and Indian Bank each acquired 13.27% stake in NARCL.