NEW DELHI: The National Asset Reconstruction Company (NARCL), which was supposed to start functioning in April, is yet to begin the process of acquiring stressed loans from banks.
Banking sources told this newspaper that no bank has begun the transfer of loans, which is likely to start only by the end of the September quarter. NARCL was supposed to acquire bad loans worth Rs 51,000 crore by April 2022.
However, it seems to be taking longer time than expected, to get its operations in place. On Friday, Punjab National Bank MD and CEO Atul Kumar Goyal said that in the first phase, the bank will transfer eight accounts with bad loans amounting to Rs 2,486 crore by the end of the September quarter.
While he did not elaborate on the reasons for the delay in transferring the loans, he said the banks are expected to complete the process by the end of the current quarter.
NARCL, also known as the bad bank, will acquire and aggregate the bad loans from lenders and then transfer the same to India Debt Resolution Company (IDRCL) for resolution of those loans.
It is likely to acquire Rs 2 lakh crore of stressed loans from the banking sector. The lenders will receive 15% upfront cash payment and the rest in the form of security receipts guaranteed by the government of India for their face value.
The guarantee is for Rs 30,600 crore and the same will be valid for five years. Former SBI official Sundar Natarajan has been appointed as the managing director of NARCL and Avinash Kulkarni has taken charge of IDRCL. While PSU banks together hold 51% stake in NARCL, Canara Bank is the sponsor bank with a 12% shareholding.