Cabinet Approves Guarantee Of Up To Rs 30600 Crore To Back Security Receipts To Be Issued By NARCL

The Cabinet had yesterday approved government guarantee of up to Rs 30600 crore to back security receipts to be issued by National Asset Reconstruction Company (NARCL), Finance Minister Nirmala Sitharaman stated today. NARCL proposes to acquire stressed assets of about Rs. 2 Lakh crore in phases within extant regulations of RBI. It intends to acquire these through 15% Cash and 85% in Security Receipts (SRs).

Insolvency and Bankruptcy Code (IBC), strengthening of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI Act) and Debt Recovery Tribunals, as well as setting up of dedicated Stressed Asset Management Verticals (SAMVs) in banks for large-value NPA accounts have brought sharper focus on recovery. In spite of these efforts, substantial amount of NPAs continue on balance sheets of banks primarily because the stock of bad loans as revealed by the Asset Quality Review is not only large but fragmented across various lenders. High levels of provisioning by banks against legacy NPAs has presented a unique opportunity for faster resolution.

Powered by Capital Market - Live News