The finance ministry on Monday said the ₹6,000-crore National Asset Reconstruction Company (NARCL), or bad bank, is expected to take over the first set of non-performing accounts of banks next month, Economic Times reported.
In a series of tweets, the ministry said finance minister Nirmala Sitharaman on Monday reviewed the progress in setting up the NARCL.
The minister was apprised of the progress achieved and took note of the approvals and permissions received for both NARCL and IDRCL from the government and regulators.
"With the account-wise due diligence nearing completion, the first set of accounts is expected to be transferred during July 2022. "The remaining accounts are proposed to be taken over within the third quarter of the current financial year," said one of the tweets.
NARCL is a special purpose asset reconstruction company for taking over the large value NPA accounts (above ₹500 crore) from banks.
NARCL has a shareholding from 15 Indian lenders, and Canara Bank is the sponsor of this Asset Reconstruction Company (ARC).
Together with debt management company IDRCL, they are presently engaged in completing the financial and legal due diligence of the identified accounts for takeover by lenders.
In September last year, the government announced a guarantee worth ₹30,600 crore for security receipts issued by NARCL. The guarantee is valid for five years.
Banks have identified a total of 38 NPA (Non-Performing Asset) accounts worth ₹82,845 crore to be transferred to NARCL initially.
While public sector banks have taken a majority stake in NARCL, India Debt Resolution Company Ltd (IDRCL) will be majorly owned by private sector banks. SBI, Union Bank of India, and Indian Bank each own 13.27 per cent of NARCL.
Last month, NARCL said Natarajan Sundar had assumed the charge of MD and CEO of the bad bank.
