NPA: First group of NPAs expected to be transferred to a bad bank next month: Treasury Department

The Treasury said Monday the Rs 6,000 crore National Asset Reconstruction Company (NARCL) or bad bank is expected to take over the first batch of bad accounts from banks next month. NARCL is a specialist asset reconstruction company to take over high value NPA accounts (over Rs 500 crore) from banks.

In a series of tweets, the ministry said Finance Minister Nirmala Sitharaman reviewed progress on establishing the NARCL on Monday.

The Minister was briefed on the progress made and noted the approvals/approvals received for both NARCL and IDRCL from the Government and Regulators.

The NARCL and IDRCL boards, including MDs, are in place.

“With account related due diligence nearing completion, the first set of accounts is expected to be transferred in July 2022. The remaining accounts are scheduled to be acquired within the third quarter of the current fiscal year,” one of the tweets said.

Last month, NARCL said Natarajan Sundar had assumed responsibility as the bad bank’s MD and CEO.

NACL has shares in 15 Indian lenders and

is the sponsor of this Asset Reconstruction Company (ARC).

Along with debt management firm IDRCL, they are currently completing financial and legal due diligence on identified accounts for lender takeovers

In September last year the government announced a guarantee worth Rs 30,600 crore for security receipts issued by NARCL. The guarantee is valid for five years.

Banks have identified a total of 38 non-performing assets (NPA) accounts valued at 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 mostly owned by private sector banks.

and have each acquired a 13.27 percent interest in NARCL.

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