Lenders will transfer NARCL problem loans in the amount of 89,000 kr.



Wambai : Lenders decided to transfer 22 bad loan accounts first RUR 89,000 proposed by National Asset Reconstruction Company Ltd (NARCL) by helping clean up their balance sheets, a senior banker said.

The total amount of bad loans that is likely to be transferred to the trenches will be 2 trillion As announced in the union budget on February 1, the plan is to create a bank for bad loans in the amount of Rs 500 crores and up, in a structure that will include an Asset Reconstruction Company (ARC) and an Asset Management Company (AMC) to manage and recover undeveloped assets. Once completed, the transfer will release the banks that are overburdened. 7 trillion bad debts.

“The Indian Banks Association (IBA) has asked leading banks to convene meetings and keep an endorsement ready so that once the ARC is formed, they can start the process. I think that the assessment in the first stage was carried out for 22 accounts approximately RUR 89,000, ”said Rajkiran Rai Ji, IBA Chairman and Chief Executive Officer of Union Bank of India.

Rai further refined his estimate by saying that banks have identified the accounts that can go to ARC in the first phase and have come to that number. However, once the ARC is formed, management will review these assets and, only if they consider it worthwhile, will make an offer.

Like some of its peer banks, Union Bank of India is likely to receive a 9% stake in the asset reconstruction company.

“We have done some preliminary work to set the stage so that it can take off quickly after registering with ARC. In general, we have identified accounts where there is almost 100% of reserves, and they are higher Rs500 crore open, “Rye said.

According to him, the main advantage of the proposed ARC is the ability to aggregate bad loans from all members of the consortium. Currently, most ARCs buy bad assets from individual banks, while other banks may choose not to part with their risks on the same loan. This poses a problem for quick decision making when it comes to approving resolution plans.

“This ARC will handle the assets listed above. Rs500 crores and the main advantage of NARCL is debt aggregation. They need to be able to take the entire asset for a quick solution, ”Rye said, adding that existing ARCs are unable to buy large assets at the industry level.

“Thus, they only make partial calculations. Their options are very limited, so they will stay in the space below. Rs500 crore, he said.

When asked if credits will be transferred to this ARC after the initial Rs 89,000, Rai explained that the additional loans will be phased out.

“According to preliminary estimates, this company can take on about 2 trillion bad loans. These numbers are estimates by the IBA and the banking sector, and once the ARC is formed, it will receive these calls. Approximately, according to our estimates, about The 2 trillion NAP could gradually disappear, ”he added.

Care Ratings believes that after the transfer 2 trillion completed, revised gross bad loans ratio may be about the same level as it was before the Reserve Bank of India (RBI) asset quality audit in 2015.

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