NARCL and IDRCL
1.Context:
Banks Miss 50k-cr Bad loan transfer deadline to NARCL.The March 31st deadline was set by Th State Bank Of India within which Banks have to Transfer 50,000 Crore of Bad Loans to the National Asset Reconstruction Company Limited (NARCL).
A Total of 38 Non-performing accounts amounting to 82,845 crores which were have been identified to transfer in a Phased Manner. In Phase-I about 15 Accounts total 50,335crores.
2.About National Asset Reconstruction Company Limited(NARCL):
- NARCL has been Incorporated under the Companies Act. it's a bad bank created by the Government in the mould of an asset reconstruction Company
- NARCL will pick up bad loans above a Certain Threshold from Banks and would aim to sell them to Perspective buyers of distressed debt
- NARCL will also be responsible to value the bad loans decide on what price they would be sold
- Bad Bank would provide government receipts to banks as it takes on Non Performing Assets from their Banks
3.Indian Debt Resolution Company Limited(IDRL)
- It's another Entity which will try to Sell Stressed Assets Acquired by NARCL
- State-Owned Banks will hold a 51% stake in IDRL and Financial Institutions(FI) and Debt Management Companies hold a 49% stake
- Indian Bank's Association had proposed to create a bad bank for a swift resolution to Non-Performing Assets (NPA) following this Finance Minister has Put up these two
