The Hindu Business Line : ARCIL may rope in NBFCs for faster NPA recovery

Mr S. Khasnobis, President and COO, Asset Reconstruction Company (India) Ltd. and Mr. S. Srinivasa Rao, Managing Director, APITCO Ltd, addressing the media in Hyderabad on Friday. - - A. Roy Chowdhury

Hyderabad , Oct. 8

THE Asset Reconstruction Company (India) Ltd (ARCIL) proposes to rope in some of the healthy non-banking financial institutions (NBFCs) as its enforcement agencies for faster recovery of non-performing assets (NPAs) of the banking system.

Disclosing this at a press conference here on Friday, the ARCIL President and Chief Operating Officer (COO), Mr S. Khasnobis, said, "We have identified around ten entities for appointing them as enforcement agencies, which includes five NBFCs."

So far, ARCIL has appointed two government bodies - the Industrial and Technical Consultancy Organisation of Tamil Nadu Ltd (ITCOT) and the Andhra Pradesh Industrial and Technical Consultancy Organisation Ltd (APITCO) - and one NBFC, Usha Martin Finance, as the enforcement agencies or portfolio resolution agencies.

Stating that rough estimates put the non-performing loans (NPLs) in the Indian banking system at around Rs 1,50,000 crore, Mr Khasnobis said ARCIL had, so far, acquired 189 corporate accounts from 16 banks with NPLs of Rs 9,600 crore against which it had issued papers worth Rs 2,080 crore in favour of these banks. Of these accounts, 73 were large ones and 116 were small accounts.

Highly optimistic of the huge potential for ARCIL in the country, he said the company expects to realise small NPLs in a couple of years and the large accounts in about five years.

On the arrangement with APITCO, Mr Khasnobis said ARCIL has acquired Rs 125 crore of NPLs from 20 accounts of Andhra Bank and appointed APITCO as the portfolio resolution agency to make recovery in respect of the assets.

APITCO would be allowed to go in for recovery of these NPLs through settlement or compromise, sale of the secured assets, enforce the provisions of SARFAESI Act through Debts Recovery Tribunals or other courts of law or any other means in consultation with ARCIL, he said.

Stating that the enforcement agencies would be paid remuneration or compensation for acting as ARCIL's agents, he, however, declined to divulge the exact percentage of payment.

Mr Khasnobis also refused to disclose the worth of paper ARCIL issued against the NPLs it had acquired from 16 banks so far.

ARCIL, which is currently owned by public sector banks to the tune of 49 per cent and by private players with 51 per cent holding in the Rs 10 crore paid-up equity share capital, is planning to raise Rs 90 crore fresh capital from the existing equity holders shortly, Mr Khasnobis said.

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