The government-owned BoI said in an exchange filing that it has invested Rs 109 crore in NARCL under preferential share issuance.
The approvals required for setting up NARCL and IDRCL, including from the RBI, have now been received, lending major SBI said on Friday.
The bad bank has two legs — National Asset Reconstruction Company, to identify, aggregate and acquire stressed assets from lenders, and India Debt Resolution Company to handle the debt-resolution.
ICRA said in a note that the banks will raise capital through internal accruals and fundraising from the market adding that the lenders have the ability to manage.
The biggest issue with the NARCL is that it will be owned largely by public sector banks and have its management drawn mostly from them.
IBA, entrusted with the task of setting up a bad bank, has put a preliminary board for NARCL in place. The company has hired P M Nair, a stressed assets expert from SBI, as the managing director.
R-Naval has a debt of Rs 11,000 crore and the banks have already provided for 100 per cent of the debt, for the last 8 years.