Banking secretary to examine how poorly run banks operate

On Friday, banking secretary Vivek Joshi will meet with representatives from the National Asset Reconstruction Company Limited (NARCL) and the India Debt Resolution Company Limited (IDRCL), as well as public sector banks (PSBs), notably the State Bank of India (SBI).

According to official sources, the meeting would examine the bad bank’s performance and talk about long-pending cases under the Insolvency and Bankruptcy Code (IBC), with the secretary of the Department of Financial Services (DFS) chairing it.

In July 2021, NARCL was founded as a “bad bank” to tackle the growing problem of non-performing assets (NPAs). Public sector banks (PSBs) and other financial institutions collaborate to form NARCL, a joint venture that is essential to resolving distressed assets and boosting the banking industry.

Acquiring and resolving non-performing assets (NPAs) from banks and other financial institutions enables them to simplify their balance sheets and concentrate on their core banking operations. This is one of NARCL’s main duties. After being bought, the distressed assets are either sold to prospective investors, restructured, or turned around in order to maximize their worth and promote quick resolution.

By November, ten PSBs had transferred problematic loans totaling Rs 11,617 crore to the NARCL, according to documents presented in the Rajya Sabha. With Rs 4,508 crore, SBI accounted for the most debt transferred, followed by Punjab National Bank (2,138 crore), Canara Bank (1,858 crore), and Union Bank (1,831 crore).

NPAs have also been transferred to NARCL by a number of other PSBs. Indian Bank moved Rs 233 crore, while Bank of Maharashtra allotted Rs 796 crore. Rs 114 crore was transferred by Bank of Baroda, Rs 70 crore by Central Bank of India, Rs 49 crore by Bank of India, and Rs 20 crore by Indian Overseas Bank.