Business Daily from THE HINDU group of publications
Sunday, Dec 24, 2006
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Business Daily from THE HINDU group of publications Sunday, Dec 24, 2006 ePaper |
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Money & Banking
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Non-Performing Assets StanChart plans asset reconstruction co Archana Venkat
Through the ARC, loan portfolios and securitisation of the partner banks will be managed.
Chennai , Dec. 23 Standard Chartered Bank plans to set up an asset reconstruction company (ARC) in the first quarter of next year. According to Mr Vinayak Bahuguna, Managing Director, Alternate Investments Group, Standard Chartered Bank, the ARC will be jointly promoted by Standard Chartered and a few large Indian banks. Through the ARC, Standard Chartered will manage loan portfolios and securitisation of the partner banks. There will be no overseas company contributing either capital or expertise to the proposed ARC, said Mr Bahuguna. However, the ARC may later partner with regional banks to gain expertise on local markets. The bank has been building its assets base in the past year and recently acquired a large chunk of bad loans from ICICI Bank. At present, the bank has assets with face value of about $400 million that are managed within the bank. Some portion of this would be managed by the ARC and so would all future loan acquisitions, said Mr Bahuguna. The bank follows a flexible pricing mechanism to buy loans from other banks. When asked at what percentage the ARC would buy loans from other banks, Mr Bahuguna said it would depend upon the quality of the bad loans. "We would even pay 100 per cent value of the loan if we see potential for recovery," he said. The bank has built a team of experts as part of the asset recovery set up. The multi regional team comprises collection experts, lawyers, debt collectors and property experts, said Mr Bahuguna.
More Stories on : Non-Performing Assets | Foreign Banks | Housing Finance
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