Now a bad bank of sunken properties in India, will start with a capital of 100 crores
The process of infusion of Rs 100 crore capital in the initial stages for the formation of the bad bank is in the final stages. IBA has got the license for this bank from the Registrar of Companies.
New Delhi. Very soon, like loan bank, now a separate bad bank for bad properties. For this, the Indian Banks’ Association (IBA) will apply to the Reserve Bank for the formation of a National Asset Reconstruction Company Limited (NARCL) or a bad bank (bad-assets bank) with a proposed capital of Rs 6,000 crore. The process of infusion of Rs 100 crore capital in the initial stages for the formation of a bad bank is the final climax. IBA has got the license for this bank from the Registrar of Companies.
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4 years ago RBI made capital requirement 100 crore?
The latest update in this regard is that after the registration of the company, the process of infusion of initial capital of Rs 100 crore is being done as per the guidelines. After this, the next step of the bad bank will be audit. Thereafter, the IBA will apply to the Reserve Bank for the license for the asset reconstruction company. In 2017, the Reserve Bank of India had increased the capital requirement from Rs 2 crore to Rs 100 crore. The central bank believes that more money is needed to buy bad loans.
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8 banks will put in initial capital
The services of AZB & Partners, Legal Advisor for Bad Bank, have been engaged to obtain various regulatory approvals. Along with this, the work of completing other legal formalities is also going on. According to the information, eight banks will put the initial capital for this. These banks have committed to this. After the approval of the Reserve Bank, NARCL will increase its capital base to Rs 6,000 crore. There is a possibility that other equity participants will join it after the approval of the Reserve Bank. Even its board of directors will be expanded.
IBA’s responsibility for formation of bad bank
At present, IBA has been given the responsibility of setting up the bad bank. The initial board of NARCL has been constituted. The company has appointed asset expert PM Nair as Managing Director under pressure from State Bank of India. Other directors on the board include IBA Chief Executive Sunil Mehta, SBI Deputy Managing Director SS Nair and Canara Bank Chief General Manager Ajit Krishna Nair.
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