Indian Bank on Friday said it has picked up a 13.27 percent stake in the proposed bad bank National Asset Reconstruction Company Ltd (NARCL).
The lender has subscribed to 1,98,00,000 equity shares of NARCL for cash consideration of Rs 19.80 crore, it said in a regulatory filing. The investment of equity stake of 13.27 percent would be reduced to 9.90 percent by December 31, 2021, Indian Bank added.
Three state-owned lenders — SBI, Union Bank of India and PNB — had picked up over 12 per cent stake each in NARCL on Thursday. NARCL, which is yet to become operational, will take over the bad assets of banks in its own account for the speedy resolution of sour loans.
Last month, the Cabinet cleared a proposal to provide the government guarantee worth Rs 30,600 crore to security receipts issued by NARCL. NARCL will pay up to 15 percent of the agreed value for the bad loans in cash and the remaining 85 percent would be government-guaranteed security receipts.
It will be 51 percent owned by PSBs and the remaining by private-sector lenders. State-owned Canara Bank has expressed its intent to be the lead sponsor of NARCL with a 12 percent stake.
(Edited by : Jomy Jos Pullokaran)