Companies

IDBI Bank mulls investing in NARCL

Our Bureau Mumbai | Updated on May 03, 2021

Large public sector and private sector banks will be investing in NARCL, says Rakesh Sharma, MD & CEO at IDBI Bank

IDBI Bank is considering picking up a stake in the National Asset Reconstruction Company (NARCL) which is being set up jointly by banks to clean up their books.

Rakesh Sharma, MD & CEO at IDBI Bank said that large public sector and private sector banks will be investing in NARCL, with each bank taking less than 10 per cent stake. So, IDBI Bank will also consider investing in the company, Sharma said. He observed that consortium loans (₹500 crore and above) will be transferred to NARCL. The quantum of stressed loans to be transferred to NARCL will be a reasonably good number so that the bank is able to reduce its gross non-performing assets, he added.

Also read: ‘Offloading of LIC stake in IDBI Bank will hit policyholders’

In her Union Budget speech on February 1, 2021, Finance Minister Nirmala Sitharaman said that an Asset Reconstruction Company and an Asset Management Company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds and other potential investors for eventual value realisation.

Published on May 03, 2021

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