National Asset Reconstruction Co. Ltd. (NARCL)
Need
- Stressed Assets: The Indian banking system faces a significant amount of stressed assets (7.5 per cent of advances in March 2021) as well as a high level of provisioning.
Drawbacks of ARCs
- Lack of Capital: The ARC must have sufficient cash available to match the massive volume of NPAs on the market. The ARC does not have sufficient funds to address the NPA issue.
- Price Expectations: A hurdle for ARC will be the price expectation mismatch between selling bank (s) and buying ARC, as well as agreement on an acceptable valuation of the bad assets.
- Lack of Vibrant Environment: The ....
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