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Padmakumar Nair of SBI appointed as the CEO of proposed National ARC

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Nair is currently the Chief General Manager in charge of Stressed Assets at the country’s largest bank, SBI.

State Bank of India’s Padmakumar Madhavan Nair has been named the Chief Executive Officer of the National Asset Reconstruction Company Limited (NARCL), two people directly in the know told CNBC-TV18.
“Padmakumar Nair’s official appointment has just come in on Monday evening. Interviews were conducted on Saturday”, said a person directly involved in the matter on the condition of anonymity. The Indian Banks Association is handling the process of setting up with bad bank, in consultation with the government and Reserve Bank of India.
Nair is currently the Chief General Manager in charge of Stressed Assets at the country’s largest bank, SBI. He is a State Bank veteran, with close to two decades served at the bank in various roles. He was promoted to the CMG role in April last year and has been managing stressed assets at SBI since 2017. He also served as the regional head of SBI Capital Markets in New Delhi prior to this, and as CEO of SBI at Los Angeles, California before that. Nair also had stints at the credit, corporate and wholesale banking verticals earlier.
“He understands the business very well, had worked at SBI Cap in Delhi earlier,” said a former colleague of Nair.  State Bank of India did not respond to CNBC-TV18’s query on Nair’s appointment until the time of publishing this story.
Another current SBI executive described Nair as a very hands-on person, with “rich domain expertise”. “We are very glad he was selected by the IBA,” this person said.
The National Asset Reconstruction Company Limited or NARCL was first announced in the Union Budget in February this year. The bad bank is expected to be operational by June, according to the Indian Banks Association (IBA) CEO Sunil Mehta.
The proposed bad bank is expected to take over legacy stressed assets, larger than Rs 500 crores in total exposure, from Indian banks, similar to ARC sales undertaken by banks currently. Sovereign guarantee (albeit limited), and aggregation of bad loans from various banks under one ARC for faster resolution would be the key advantages the NARCL would have over existing ARCs, according to IBA’s Sunil Mehta.
Banks have identified about Rs 1.50-2 lakh crores of bad loans to be transferred to the NARCL, CNBC-TV18 had earlier reported, and the process of transfer of bad assets using a “Swiss Challenge Method” is expected to start after September, according to people in the know.
These assets to be transferred to NARCL would be 100 percent provided by banks. Several public and some private banks are expected to jointly hold under 10 percent stake each in the National ARC.

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