NEW DELHI: The Indian Banks’ Association (IBA) has given an application to the Reserve Bank of India (RBI), seeking a license to set up National Asset Reconstruction Company Limited (NARCL) or a bad bank worth Rs 6,000 crore, according to sources. Has been done.
NARCL was incorporated in Mumbai in July after registering with the Registrar of Companies. According to sources, the company has approached RBI for a license to start asset reconstruction business after raising an initial capital of Rs 100 crore and completing other legal formalities. In 2017 the RBI raised the capital requirement to Rs 100 crore from the earlier level of Rs 2 crore, keeping in view the higher amount of cash required to buy bad loans.
Sources said the Reserve Bank has its own procedure and procedure for granting licenses for such businesses. It also said, it may take next few weeks to get the license from the regulator. Sources said the RBI approval could come in September or October. Legal advisor AZB & Partners has been engaged to obtain various regulatory approvals and complete other legal formalities. IBA entrusted with the task of setting up a bad bank has put up a preparatory board for NARCL.