Jun 13, 2022
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Recently, the Finance Minister announced that the National Asset Reconstruction Company (NARCL) along with the India Debt Resolution Company (IDRCL) will take over the first set of bad loans from banks.
The creation of a bad bank to tackle Non- Performing Assets (NPAs) is a step in the right direction if backed by long-due governance reforms in Public Sector Banks. Comment.
Also, watch a detailed video on Bad Banks & National Asset Reconstruction Company Limited by Vivek Singh Sir, our faculty for Economy, to understand the topic better and Upgrade your civils preparation :
About National Asset Reconstruction Company (NARCL): NARCL has been incorporated under the Companies Act and has applied to the Reserve Bank of India for a licence as an Asset Reconstruction Company (ARC). NARCL has been set up by banks to aggregate and consolidates stressed assets for their subsequent resolution.PSBs will maintain51% ownership in NARCL. India Debt Resolution Company Ltd (IDRCL): IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts. Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake and the rest will be with private-sector lenders. What are Non- Performing Assets? A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. |
News Source: The Hindu
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