The government has set up the India Debt Resolution Company Ltd (IDRCL), an asset management company (AMC) that will work in tandem with the National Asset Reconstruction Company Ltd (NARCL) to clean up bad loans, according to documents available with the Registrar of Companies (RoC).
Bank of Baroda (BoB), Punjab National Bank (PNB), Bank of India (BoI), Bank of Maharashtra, SBI, Union Bank of India, Canara Bank, Indian Bank, and IDBI Bank are the shareholders of IDRCL. IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts. Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake while the remaining stake will be with private-sector lenders.
It must be noted that last week, the government had cleared a guarantee of Rs. 30,600 crore for security receipts issued by NARCL., which will be buying Rs 2 lakh crore non-performing loans from banks. In the first phase, Rs 90,000 crore will come to the NARCL. These NPAs will have 100 percent provisions in the books of the banks.