India’s bad bank, National Asset Reconstruction Company Ltd (NARCL), is racing against time to complete its first transaction as the June 30 deadline nears, according to a report by the Mint quoting sources.
The RBI’s licensing norms requires the bad bank to commence operations and complete a transaction by June 30. If NARCL fails to meet this deadline, it will have to seek another extension from the RBI.
The sovereign-backed asset turnaround company had earlier set itself a deadline of March 31 to acquire Rs 50,000 crore of dud assets, but it failed to meet it due to "procedural reasons".
Sources told the publication that NARCL is still in the process of valuing assets that are to be sold by the lenders. Once the assets are valued, banks would be informed at what discount the bad bank would buy the toxic assets, and then the lenders would approach their respective boards for approval.
"There is also the requirement of running a Swiss Challenge auction for these assets after receiving an offer from NARCL. The whole process is expected to be completed by July," a source told the publication.