Synopsis
In May, banks decided to appoint Padmakumar M Nair, chief general manager in charge of stressed assets in SBI, as the MD of the NARC. According to RBI norms, an ARC should have minimum net-owned funds of not less than 15% of the total financial assets that it plans to acquire on an aggregate basis or Rs 100 crore.
Agencies
(This story originally appeared in on Jul 13, 2021)Public sector lenders led by Canara Bank have officially formed the bad bank the National Asset Reconstruction Company (NARC). Their next step now is to obtain approval from the Reserve Bank of India (RBI) to function as an ARC.
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NARCL to further Govt’s agenda of disinvestment of IDBI Bank, privatisation of PSBs
May 12, 2021
Once chunky stressed assets are out of the books, banks’ valuation will improve
The National Asset Reconstruction Company Ltd (NARCL), currently being put together by banks and other lenders, may structurally alter the balance-sheets of banks in such a way that it will further the Government’s agenda of divesting its stake in IDBI Bank and privatising two public sector banks (PSBs).
Once chunky stressed assets are out of the books, the valuation of these banks will improve, making them more saleable, opine market experts.
Padmakumar M Nair of State Bank of India (SBI) will be the chief executive of National Asset Reconstruction Company (NARCL), a proposed entity for taking over bad loans of lenders, predominantly public sector banks. NARC, also called a bad bank, is expected to be operational in June 2021.
Nair, a career banker with SBI, has been chief general manager (CGM) in the stressed assets resolution group (SARG) of the bank since April 2020.
Prior to his elevation in 2020, he worked as general manager in the SARG from 2017. He has worked mostly in the corporate banking segment in the last two decades.
Banking sources said, besides formation and establishing the structure of the company, he and his team would be involved in framing rules for making offers and acquisition of bad assets from banks.