Padmakumar M Nair to be CEO of National Asset Reconstruction CompanyPosted by Moesgaard Straarup on May 11th, 2021 NEW DELHI : Padmakumar M Nair, Chief General Manager of Stressed Assets Resolution Group at SBI, will head the National Asset Reconstruction Company Ltd, the proposed bad bank when planning on taking over stressed assets of lenders, according to sources. Nair has been found for the CEO post of the proposed bad bank NARCL as he's got a long exposure of handling resolution of stressed assets, they said. He'll be joining the company on deputation basis for as soon as, two sources said. Finance Minister Nirmala Sitharaman in the budget for 2021-22 had announced that an asset reconstruction company or perhaps a bad bank would be create to consolidate and dominate existing stressed assets of lenders and undertake their resolution. Bad bank refers to a financial institution that gets control bad assets of lenders and undertakes resolution. The new entity is being created in collaboration with both public and private sector banks. Sitharaman in the Budget 2021-22 had mentioned that the high level of provisioning by public sector banks of these stressed assets needed measures to clean up the bank books. "A SECURED ASSET Reconstruction Company Limited and Asset Management Company will be set up to consolidate and take over the prevailing stressed debt," she had said in the Budget speech. It'll then manage and get rid of the assets to alternate investment funds along with other potential investors for eventual value realisation, she added. National Asset Reconstruction Company Ltd (NARCL) will pay up to 15 % of the agreed value for the loans in cash and the rest of the 85 per cent would be government-guaranteed security receipts. 해외선물커뮤니티 would be invoked when there is loss against the threshold value. Last year, Indian Banks' Association (IBA) had made a proposal for creation of a negative bank for swift resolution of non-performing assets (NPAs). The government accepted the proposal and decided to go for asset reconstruction company (ARC) and asset management company (AMC) model because of this. The Reserve Bank of India (RBI) has said that loans classified as fraud can't be sold to NARCL. According to the annual report of the RBI, about 1.9 lakh crore of loans have been classified as fraud as on March 2020. As per the Financial Stability Report released by the RBI, the NPAs of the banking sector were projected to surge to 13.5 % of advances by September 2021, from 7.5 per cent in September 2020, beneath the baseline scenario. The report had warned that when the macroeconomic environment worsens into a severe stress scenario, the NPA ratio may escalate to 14.8 per cent. To facilitate smooth functioning of asset reconstruction companies, the RBI last month made a decision to set up a panel to attempt a comprehensive overview of the working of such institutions. After enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 2002, regulatory guidelines for ARCs were issued in 2003 to enable development of this sector also to facilitate smooth functioning of the companies. Since then, while ARCs have grown in number and size, their potential for resolving stressed assets is yet to be realised fully. Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter. Never miss a tale! Stay connected and informed with Mint. Download our App Now!!Like it? Share it! More by this author |