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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.
SBI s Padma Nair to be NARC s first CEO
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Synopsis
The NARC will aggregate the bad loans and transfer them to a step-down asset management company (AMC) which will manage the assets for sale. A separate CEO is likely to be appointed for the AMC. The NARC will aggregate the bad loans and transfer them to a step-down asset management company (AMC) which will manage the assets for sale. A separate CEO is likely to be appointed for the AMC.
State Bank of India (SBI) chief general manager (CGM) Padma Kumar Nair is all set to take over as the first chief executive officer (CEO) for the government approved National Asset Reconstruction Company s (NARC), three people familiar with the process said. Nair was selected as the preferred candidate by a five member committee appointed by the Indian Banks Association (IBA) on Saturday. He is likely to be given a five year term.
File photo for representation purpose only
MUMBAI: Asset reconstruction companies (ARCs) have asked the RBI to let them sell assets of defaulting promoters back to them. They have also asked the central bank to allow corporates and high net worth individuals to invest in troubled loans through the securities issued by ARCs.
The Association of ARCs in India recently responded to the RBI’s call for suggestions to overhaul their structure in the country. ARCs were created under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002, which allowed lenders to seize assets.
The role of ARCs reduced after the Insolvency and Bankruptcy Code (IBC), 2016, which enabled banks to sell the defaulting business to a new promoter. To prevent defaulters from buying back their companies at a discount, Section 29A was incorporated. This blacklisted defaulting promoters. After the IBC Act, the RBI had asked ARCs to stick to the princip
Bad bank to become a reality very soon, says SBI MD Swaminathan J
Bad bank to become a reality very soon, says SBI MD Swaminathan J
State-run lenders will take a lead in creation of the bad bank, but the sick asset resolution platform needs the support of private banks and other lenders to be successful, State Bank of India Managing Director Swaminathan J said on Thursday.
If all lenders come on board, the National Asset Reconstruction Company (NARC) announced in the budget will be able to aggregate 100 per cent of a sick company s outstanding loans, which shall ultimately lead to better resolution of the asset quality stress for all.