RBI grants licence to National Asset Reconstruction Company: IBA CEO

• ByAyushi Ray     |    October 5, 2021

RBI grants licence to National Asset Reconstruction Company: IBA CEO. Finance Minister Nirmala Sitharaman had in Budget 2021-22 said that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up bank books. “An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt,” she had said in the Budget speech.

It will manage and dispose of the assets to alternative investment funds and other potential investors for eventual value realisation, she had said. Last month, the Cabinet cleared a proposal to provide government guarantee worth Rs 30,600 crore to security receipts issued by NARCL. NARCL will pay up to 15 percent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts. It will be 51 percent owned by PSBs and the remaining by private sector lenders.

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