New committee to look into fresh list of accounts to be transferred to NARCL

The finance ministry has set up a committee under the chairpersonship of SBI chairman examine and submit a fresh list of accounts for transfer to the National Asset Reconstruction Company Limited (NARCL) to bolster the resolution pipeline and align the process with its intended objectives.

A review meeting — held under the chairmanship of M Nagaraju, secretary, Department of Financial Services (DFS), ministry of finance – took stock of key operational challenges and ways to enhance the efficiency of resolution mechanisms through .

The discussion on cases at NARCL centred on expediting timelines for resolution of accounts. The Secretary underscored NARCL’s pivotal role as a specialised entity designed to accelerate the resolution of large-value stressed assets, thereby strengthening the financial ecosystem.

During the meeting, it was informed that NARCL has acquired 22 accounts with an exposure of Rs 95,711 crore, demonstrating its effectiveness in driving resolutions. Additionally, 28 accounts with an exposure of Rs. 1.28 lakh crore were resolved by banks, subsequent to the NARCL making the offers, reflecting the indirect impact of NARCL’s presence in settling/successfully pursuing recovery through other resolution mechanisms. Banks were advised to strengthen their synergies with NARCL to ensure efficient and timely resolutions.

The meeting also did a detailed review of the top 20 accounts pending for admission at the NCLT, examining their current status and outlining necessary actions to expedite proceedings was taken up. The meeting also discussed ways to make the resolution mechanism through NARCL more efficient.  

During the meeting banks were advised to ensure active monitoring of top 20 cases of banks at the Managing Director level, with all proceedings to be attended by senior officials not below the rank of General Manager. Further, banks were urged to minimise procedural delays and strongly oppose unnecessary adjournments.

On the lack of real-time information sharing with Financial Creditors (FCs) about applications filed by Operational Creditors (OCs), which often caused coordination challenges, representatives from the Ministry of Corporate Affairs (MCA) informed about the proposed plan already in place to develop an integrated portal to keep banks informed about all proceedings, further enhancing transparency and coordination in the resolution process.

The meeting was also attended by senior officials of DFS, the Insolvency and Bankruptcy Board of India (IBBI), the Ministry of Corporate Affairs (MCA), NARCL, India Debt Resolution Company Limited (IDRCL) and chief executives of Public Sector Banks.

Also See: 831 loan accounts of PNB involving Rs 1.03 lakh cr under IBC