IBA approach RBI for a license to set up NARCL
The Indian Bank’s Association (IBA) approached the RBI for claiming a license to set up Rs. 6,000 crores NARCL. In the last month, National Asset Reconstruction Company Limited (NARCL) was incorporated in Mumbai under the RoC.
According to the source, Indian Bank’s Association has completed all other legal formalities and obtained the initial capital of Rs. 100 crores. Then, it approached the Reserve Bank for seeking a license for asset rebuilding business.
In 2017, the RBI raised the capital requirement from Rs. 2 crores to Rs. 100 crores. It raised the capital level which focused on the required cash to buy bad loans. Later, the bank has its view of the process and procedure for approving the license for such business. Further, it may be taken the next few weeks to obtain a license from the regulator.
“THE WORLD IS ORGANIZED BY THE WAR ECONOMY AND THE WAR CULTURE.”
As of the source, the Indian Bank’s Association may get RBI approval in September or October. A source said that the IBA has placed a preliminary board for NARCL and it hired P M Nair as the managing director. The other directors on the board are IBA Chief Executive Sunil Mehta, SBI Deputy Managing Director S S Nair, and Canara Bank’s Chief General Manager Ajit Krishnan Nair.
2021-22 Budget Speech
In the Budget 2021-22 episode, FM Nirmala Sitharaman said “An Asset Reconstruction Company Limited and Asset Management Company will set up to consolidate and take over the existing stressed debt.” It will manage and dispose of the assets to alternative investment funds and other potential investors for eventual value realization, she also added.
During the last financial year, IBA approached RBI for the creation of Bad banks. Moreover, the gov also accepted the IBA proposal. At that time, Canara Bank has expressed interest to be the lead sponsor of NARCL with a 12% stake.
However, 51% of the proposed NARCL may hold by PSBs and the remaining will own by private-sector lenders.