{"id":134462,"date":"2021-09-16T20:45:08","date_gmt":"2021-09-16T15:15:08","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=134462"},"modified":"2021-09-17T18:55:50","modified_gmt":"2021-09-17T13:25:50","slug":"union-cabinet-clears-decks-for-national-asset-reconstruction-company","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/union-cabinet-clears-decks-for-national-asset-reconstruction-company\/","title":{"rendered":"Union Cabinet clears decks for National Asset Reconstruction Company"},"content":{"rendered":"\n<p><b>What is the News?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The Union Government has approved a proposal that requires the government to guarantee <strong>Security Receipts(SR)<\/strong> issued by <strong>National Asset Reconstruction Company Ltd (NARCL)<\/strong> when buying <strong>non-performing assets<\/strong> (NPAs) from banks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This will <strong>clear the path for the launch of National Asset Reconstruction Company (NARCL).<\/strong>\u00a0<\/span><\/p>\n<p><strong>Note:<\/strong>\u00a0Security Receipts (SR) are issued by ARCs when Non-Performing Assets(NPAs) of commercial banks(CB) or financial institutions(FI) are acquired by the ARCs for the purpose of recovery.<\/p>\n<p><b>About National Asset Reconstruction Company Ltd(NARCL)<\/b><\/p>\n<p><span style=\"font-weight: 400;\"><strong>The NARCL<\/strong> is a type of Bad Bank that has to be set up to resolve the problem of bad loans impacting the public sector banks.<\/span><\/p>\n<p><b>Note<\/b><span style=\"font-weight: 400;\">: <\/span><span style=\"font-weight: 400;\">A<\/span><span style=\"font-weight: 400;\"> bad bank<\/span><span style=\"font-weight: 400;\"> is basically an entity that houses the bad loans (non-performing assets) of banks and resolves or liquidates them to recover as much money as it can.<\/span><\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><strong>Read more<\/strong>: <a href=\"https:\/\/forumias.com\/blog\/establishment-of-bad-banks-associated-issues-and-significance\/\" target=\"_blank\" rel=\"noopener\">Establishment of Bad Banks \u2013 associated Issues and Significance\u00a0<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\"><strong>Sponsored by<\/strong>: The NARCL is <\/span><span style=\"font-weight: 400;\">sponsored primarily by Canara Bank (likely to take a 12% equity stake) and has equity participation by other nationalised banks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Functions:<\/strong> NARCL will buy the bad loans from banks and issue security receipts (SR) for up to 85% and cash for the remaining, in line with standard industry practice. <\/span><span style=\"font-weight: 400;\">These receipts are redeemable as and when the ARC recovers a specific loan.\u00a0<\/span><\/p>\n<p><b>Source:<\/b><span style=\"font-weight: 400;\"> This post is based on the article<\/span><b> \u201cUnion Cabinet clears decks for National Asset Reconstruction Company\u201d <\/b><span style=\"font-weight: 400;\">published in <\/span><b>Business Standard <\/b>on <b>16th September 2021.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the News? The Union Government has approved a proposal that requires the government to guarantee Security Receipts(SR) issued by National Asset Reconstruction Company Ltd (NARCL) when buying non-performing assets (NPAs) from banks. This will clear the path for the launch of National Asset Reconstruction Company (NARCL).\u00a0 Note:\u00a0Security Receipts (SR) are issued by ARCs&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/union-cabinet-clears-decks-for-national-asset-reconstruction-company\/\">Continue reading <span class=\"screen-reader-text\">Union Cabinet clears decks for National Asset Reconstruction Company<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[526,8716,9788,528],"class_list":["post-134462","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-bad-bank","tag-money-and-banking","tag-national-asset-reconstruction-company","tag-npa","entry"],"jetpack_featured_media_url":"","views":{"total":2,"cached_at":"","cached_date":1702633006},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/134462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=134462"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/134462\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=134462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=134462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=134462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}