Bad Bank: NARCL was formed in July with the registration with the Registrar of Companies in Mumbai. Let us tell you that a bad bank is being formed to deal with the problem of non-performing assets (NPA) of banks.
- TV9 No.
- Publish Date – 8:22 am, Tue, 5 October 21Edited By: Sanjeet Kumar
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The Reserve Bank of India (RBI) has given license for the formation of National Asset Reconstruction Company Limited (NARCL). With this initiative, the way has been cleared for the bad bank to come into operation. NARCL (National Asset Reconstruction Company) was formed in July with the registration with the Registrar of Companies in Mumbai. Let us tell you that a bad bank is being formed to deal with the problem of non-performing assets (NPA) of banks. IBA has got the responsibility of formation of bad bank.
Indian Banks’ Association (IBA) Chief Executive Officer Sunil Mehta wrote on Twitter, RBI approved the formation of NARCL on October 4, 2021. The approval has been given under Section 3 of the SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002.
The government will give a guarantee of Rs 30,600 crore for the bad bank ie Asset Reconstruction Company. This was announced by the Finance Minister while presenting the budget on 1 February 2021. About 2 lakh crore NPA will be transferred to the bad bank. In the first phase, NPA transfer of 90 thousand crores will be done under this.
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