Lenders have started looking for buyers for their stakes in asset reconstruction companies (ARCs) to free up capital for the launch of the National Asset Reconstruction Co. Ltd (NARCL), the ‘bad bank’ they will jointly own. In February, state-run Punjab National Bank (PNB) put its entire 10.01% stake in Arcil, one of India’s oldest ARCs with assets worth ₹12,000 crore under management, for sale. A clutch of lenders, including Punjab National Bank and Canara Bank, will own stakes in NARCL. The bad bank will be headed by Padmakumar Madhavan Nair, a stressed assets expert from State Bank of India (SBI), as managing director. It is expected that the warehousing of bad loans by NARCL will allow banks to cut losses and renew lending.

Source: Mint July 18, 2021 18:56 UTC