BAD BANK Flashcards
What is the formal name of the bad bank?
National Asset Reconstruction Company Limited(NARCL)
What does the Bank do?When was the bank announced?
It is a bank that will acquire the stressed assets from Bank balance of Banks
Stressed assets=Bad debts(All loans given by the bank to its clients)– Non performing assets
2021 budget
Asset Reconstruction Company (ARC).
or an Asset Management Company (AMC)
Who is the CEO of the NARCL?
Natarajan Sundar
What is the ownership division of NARCL?
Majority stake of 51% is with Public sector banks
How will the asset takeover happen?
it will happen in multiple phases, the first phase takeover will happen by march 31st
As per the 1st phase how many NPA’s will be transferred to Bad bank?
at least 15 accounts worth Rs 50,335 crore will be
transferred to the proposed bad bank by March 31.
Under phase 1
How much NPA’s will be takenover in all the phases com bined?
A total of 38 accounts
aggregating Rs 82,845 crore
What will the entities whose assets are takenover get in return?
The NARCL will pay combesation for the bad debts in the ratio (15:85).
15 % will paid in cash , while 85% of the debt value will be paid through SR’s (security receipts), guaranateed by the govt
What it the minimum amount which the bank has guaranteed to pay the entity for asset takeover?
Minimum Rs 30,600 crore for
security receipts to be issued by NARCL as non-cash consideration on the
transfer of NPAs.
The NARCL has guaranteed that they will repay the NPA amount within _______years?
5-year guarantee
Which entity is responsible for the NPA debt repayment investigation and collection?
India Debt Resolution Company Ltd (IDRCL) is set up along with Bad bank
Like brother institutes
Who is the chairman of India Debt Resolution Company Ltd (IDRCL)
Diwakar Gupta
Who is the CEO of India Debt Resolution Company Ltd (IDRCL)
Sanjay Jain
What is the agreement between NARCL and IDRCL?
NARCL and IDRCL will have an exclusive arrangement that will be as per the scope defined in the ‘Debt Management Agreement’ to be executed between
these two entities.
Arrangement will be on a ‘Principal-Agent’ basis and
final approvals and ownership for the resolution shall lie with NARCL as the
Principal
What is the ownership scenario of IDRCL?
PSBs and Public Financial Institutes (FIs) will hold a maximum of 49% stake in IDRCL. The remaining 51% stake will be with private-sector
