MUMBAI: Private sector India Debt Resolution Company (IDRCL), which will help the public sector bank in resolving non-performing assets (NPAs), will take some more time to go ahead as some shareholders are still on the board. remains to be included. This is because private sector lenders HDFC bank, ICICI Bank And axis BankWhich plans to hold a major part of IDRCL’s capital, are classified as foreign entities under the law and require permission from the government. Investment,
The bad bank proposal announced in the February 2021 budget envisaged the public sector National Asset Reconstruction Company (NARCL) to get bad loans from banks. Once these loans have been pooled from multiple lenders, they will be sorted out with private sector expertise from IDRCL.
In January 2021, SBI Chairman Dinesh Khara had announced that NARCL had received all approvals to start operations and loans worth Rs 50,000 crore would be transferred to NARCL by March 2022. However, the second phase of resolution would require IDRCL. be in place.
White reserve Bank of India has allowed private bank To invest in IDRCL, they also have to seek government approval for foreign investment norms. All three private banks are mainly owned by foreign investors.
Meanwhile, PSU banks have ensured that IDRCL is incorporated by making an initial investment. Earlier this month IDBI Bank, now a private bank, said it would invest Rs 272 crore through equity and debt in IDRCL. It said its stake would rise to 9% by the end of March.
Last week, UCO Bank said it was acquiring 3% stake in IDRCL for Rs 1.5 crore. The bank had indicated that it would complete the transaction this month. In February, Bank of Baroda said it has subscribed 99,000 shares amounting to 12.3% stake in the company, which will be reduced to 9.9% by the end of March 2022.
For banks, it is a race against time to transfer the loan to the bad bank. Since most loans are provided for, any recovery will go towards profits. The fact that security receipts are guaranteed by the government will help in releasing capital for banks. In the past quarters, there have been major recoveries almost every quarter, which has added to the bottom line of the lenders. No major recovery has been seen in the fourth quarter.
Banks are expected to recover Rs 3,600 crore on their loans given to Syntex Industries after Reliance Industries was declared the highest bidder.
The bad bank proposal announced in the February 2021 budget envisaged the public sector National Asset Reconstruction Company (NARCL) to get bad loans from banks. Once these loans have been pooled from multiple lenders, they will be sorted out with private sector expertise from IDRCL.
In January 2021, SBI Chairman Dinesh Khara had announced that NARCL had received all approvals to start operations and loans worth Rs 50,000 crore would be transferred to NARCL by March 2022. However, the second phase of resolution would require IDRCL. be in place.
White reserve Bank of India has allowed private bank To invest in IDRCL, they also have to seek government approval for foreign investment norms. All three private banks are mainly owned by foreign investors.
Meanwhile, PSU banks have ensured that IDRCL is incorporated by making an initial investment. Earlier this month IDBI Bank, now a private bank, said it would invest Rs 272 crore through equity and debt in IDRCL. It said its stake would rise to 9% by the end of March.
Last week, UCO Bank said it was acquiring 3% stake in IDRCL for Rs 1.5 crore. The bank had indicated that it would complete the transaction this month. In February, Bank of Baroda said it has subscribed 99,000 shares amounting to 12.3% stake in the company, which will be reduced to 9.9% by the end of March 2022.
For banks, it is a race against time to transfer the loan to the bad bank. Since most loans are provided for, any recovery will go towards profits. The fact that security receipts are guaranteed by the government will help in releasing capital for banks. In the past quarters, there have been major recoveries almost every quarter, which has added to the bottom line of the lenders. No major recovery has been seen in the fourth quarter.
Banks are expected to recover Rs 3,600 crore on their loans given to Syntex Industries after Reliance Industries was declared the highest bidder.