Inter-creditor agreements (ICAs) for all the assets identified for transfer to the National Asset Reconstruction Company (NARCL) in the very first round have been signed, State Bank of India (SBI) chairman Dinesh Khara told FE in an interview.
In terms of the shareholding of NARCL, private-sector banks have come forward and they are in the approach of getting the requisite approvals in order to invest in the entity, Khara mentioned.
“So they are fully on board and in all those accounts where ICAs have been signed, there is a consensus among banks that all such accounts will move into NARCL,” Khara mentioned, adding that irrespective of ownership, assets would get aggregated. “All those who have signed ICAs would be happy to have the assets aggregated and move them towards resolution,” he mentioned.
An ICA is an agreement signed among the lenders to a business as a sign of their commitment to make sure a popular resolution of the tension constructed up in that business.
The NARCL has been set up with a paid-up capital of Rs 149 crore, all of which has come from eight public-sector banks. Banks are understood to have identified 22 accounts with a total outstanding of Rs 89,000 crore for transfer to the NARCL in the very first tranche. Eventually, the terrible bank is anticipated to obtain assets worth Rs 2 lakh crore from lenders. Sector analysts say that the aggregation of the exposures of many lenders is the chief benefit of the NARCL.
“The chances of resolution improve when you club together all the piecemeal exposures of each bank into a single asset. The assets identified in the first tranche are very old ones where private banks have anyway made an exit. So aggregation shouldn’t face too many challenges,” mentioned an analyst.
“One of the challenges for resolution was that each bank had a different kind of charge attached to the same asset. Aggregation through the NARCL takes care of that problem,” mentioned Ashvin Parekh, managing companion, Ashvin Parekh Advisory Services (APAS). “We must hope now that the NARCL is steered competently by the management so that there is actual resolution of stress,” he added.