Union Cabinet clears decks for National Asset Reconstruction Company

Approves government guarantee on security receipts that will be used to buy bad loans of lenders

Clearing the path for the launch of National Asset Reconstruction Company (NARCL), the Union Cabinet is learnt to have approved the government guarantee on security receipts that will be used to buy bad loans of lenders. The Centre has earmarked about Rs 31,000 crore towards this.

The guarantee provided by the Centre would be on the security receipts issued by the NARCL to buy bad loans from lenders. Banks will transfer their soured assets to NARCL at net book value. About 15 per cent would be paid in cash up front and 85 per cent through security receipts, guaranteed by the