NARCL- FAQs regarding Central Government guarantee to back Security Receipts
Frequently Asked Questions (FAQs) regarding Central Government guarantee to back Security Receipts issued by National Asset Reconstruction Company Limited (NARCL) for acquiring of stressed loan assets.
Central Government guarantee of Rs.30,600 crore to back Security Receipts issued by National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets was approved by Union Cabinet yesterday.
NARCL proposes to acquire stressed assets of about Rs. 2 Lakh crore in phases within extant regulations of RBI. It intends to acquire these through 15% Cash and 85% in Security Receipts (SRs). The following Frequently asked questions explain various aspects regarding Central Government guarantee to back Security Receipts issued by National Asset Reconstruction Company Limited for acquiring of stressed loan assets.
1.What is the national Asset Reconstruction Company Limited (NARCL)? Who has set it up?
2. What is India Debt Resolution Company Ltd. (IDRCL)? Who has set it up?
3. Why is NARCL-IDRCL type structure needed when there are 28 existing ARCs?
4. Why is a Government Guarantee needed?
5. How will NARCL and IDRCL work?
6. What benefit do banks get from this new structure?
7. Why is it being set up now?
8. Is the guarantee likely to be invoked?
9. How will Government ensure faster and timely resolution?
10. What will be the capital structure of NARCL and how much will Government contribute?
11. What will be NARCL’s strategy for the resolution of stressed assets?
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Source: PIB
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