Finance Minister Nirmala Sitharaman in an address on the bad bank said that The Cabinet has approved the government guarantee of up to Rs 30,600 crore to back security receipts to be issued by National Asset Reconstruction Company (NARCL).
The NARCL will pay up to 15% of the agreed value for the cash loans and the remaining 85% would be government-guaranteed security receipts.
FM Sitharaman had announced the proposal comprising of an asset reconstruction company and an asset management company to consolidate and take over the stress debt of Indian Banks in the FY22 Union Budget.
Canera Bank will be the lead sponsor of NARCL with a 12% stake, while the public sector bank will together hold 51% of NARCL. Padmakumar Nair of SBI has been selected as the head of the NARCL and IBA chief executive Sunil Mehta will be its non-executive chairman.