Public sector lender Canara Bank will be the lead sponsor and biggest shareholder of National Asset Reconstruction Company Ltd (NARCL) or Bad Bank with a 12 percent stake in the entity.
- NARCL is being formed by all the banks and some of the Non Performing Assets(NPA) of these banks will be transferred to NARCL for recovery.
- In the initial phase,22 bad loans worth Rs 89,000 crore were to be transferred to NARCL.
i.Setting up of NARCL, the proposed bad bank to consolidate and take over stressed assets of lenders, was announced in the Budget for 2021-22.
ii.Bad bank refers to a financial institution that takes over bad assets of lenders and undertakes resolution
iii.The Indian Banks’ Association (IBA) was appointed as the nodal agency to constitute the Asset Reconstruction and Asset Management Companies designated as NARCL and India Debt Management Company Ltd (IDMCL) respectively.
iv.NARCL is likely to be operational by July 1,2021.
Union Bank picks up a 9 percent stake in NARCL
Union Bank of India (UBI) will pick up a 9 percent stake in NARCL.
- UBI has identified NPA worth Rs.7800 crore to be transferred to the NARCL for resolution.
Also Banks such as State Bank of India, Bank of Baroda, Bank of India and IDBI Bank are expected to take up to 10 per cent stake in NARCL.
Recent Related News:
On 2nd March 2021, Arya Collateral Warehousing Services Pvt. Ltd.(Arya), a post harvest agriculture technology provider, entered into a strategic partnership with Canara Bank to offer collateral management and warehousing services to support the farmers with effective market linkage.
About Canara Bank:
Managing Director(MD) and Chief Executive officer(CEO)– L.V.Prabhakar
Headquarters– Bengaluru, Karnataka
Tagline– Together We Can
Founded in– July 1906
Syndicate Bank was amalgamated into Canara Bank on April 2020