Live
- TDP-BJP-JSP leaders file Lokesh’s nomination
- Hyderabad: Opposition indulging in divisive politics says BJP MP Laxman
- Ajith Kumar shows up to vote 30 minutes before time; Rajini stresses 'dignity in voting'
- Velapalli, Bonda Uma engage in war of words on stone incident
- Accused in stone pelting case arrested
- Watch The Viral Video Of A Woman Wearing Bikini Into Crowded Delhi Bus
- AAP Nominates Mayor and Deputy Mayor Candidates For Delhi MCD Elections
- Hyderabad: Eatala, Raghunandan, DK Aruna file nomination papers
- Chandrababu to hold Praja Galam election campaign in Kurnool today
- Rajasthan CM casts his vote, says BJP will repeat history
Government announces guarantee of up to Rs 30,600 crore to back Security Receipts to be issued by NARCL
Nirmala Sitharaman
Minister Nirmala Sitharaman has said that the Union Cabinet on Wednesday approved a government guarantee of up to Rs 30,600 crore to back Security Receipts to be issued by National Asset Reconstruction Company Limited (NARCL)
Minister Nirmala Sitharaman has said that the Union Cabinet on Wednesday approved a government guarantee of up to Rs 30,600 crore to back Security Receipts to be issued by National Asset Reconstruction Company Limited (NARCL).
Briefing media in New Delhi on the Cabinet decisions on Thursday, evening, Ms Sitharaman said, Budget-2021 had announced the government's intention to set up an Asset Reconstruction Company (ARC) along with Asset Management Company (AMC) to consolidate and take over the existing stressed debt and thereafter manage and dispose of them off to buyers for value realization. She said, Banks' asset quality review had happened in 2015, for cleaning up and fully provisioning bank balance sheets, this revealed a very high incidence of Non-Performing Assets, NPAs.
The Minister said, the government then came up with a 4R strategy of Recognition, Resolution, Recapitalisation and Reforms. She said, after recognition, quantification of NPAs started in a planned manner and recovery too started. She added that in the last six financial years, the 4Rs was executed meticulously and banks have recovered Rs 5,01,479 crore. Ms Sitharaman said, Fugitive Economic Offenders Act of 2018 is showing a lot of results. She said, in 2018, just two of the 21 Public Sector Banks were profitable. She expressed happiness that in 2020-21, only two reported losses for the year.
The Minister said, Public Sector Banks are now not only making profits, but they are also raising money from the markets, a total of Rs 58,697 crore has been raised by Public Sector Banks as debt and equity. She said, National Asset Reconstruction Company Limited will aggregate NPAs in banks' balance sheets for which full provisioning has been done and manage and dispose of them professionally, this will thus clean up banks' balance sheets.
The Minister said, along with NARCL, the government is also setting up an India Debt Resolution Company Limited. She said, PSBs will have 51 per cent ownership in NARCL, while PSBs and public financial institutions will have a maximum of 49 per cent stake.
The NARCL will purchase bad loans of the banks under a 15:85 structure, under which 15 per cent cash payment will be made to the banks for the assets after a valuation process. The remaining 85 per cent will be paid in the form of securities receipts, which will be guaranteed by the government. The guarantee of Rs 30,600 crore will cover the entire pool of Rs 2 lakh crore.
The guarantee of Rs 30,600 crore will cover the entire pool of Rs 2 lakh crore and the guarantee will represent the difference between the face value of the assets and the amount realised from liquidation or sale of assets via the NARCL. The guarantee will be valid for a period of five years.
