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Meeting Update: Finance Ministry asks banks to monitor top 20 IBC cases


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On Friday, the Finance Ministry instructed leaders of public sector banks to oversee and assess the top 20 cases under the Insolvency and Bankruptcy Code (IBC) as part of their strategy for managing non-performing assets.

In a meeting with the managing directors and CEOs of public sector banks (PSBs), Financial Services Secretary Vivek Joshi urged them to conduct monthly reviews of the top 20 cases to facilitate their resolution. Additionally, Joshi directed them to closely monitor cases that have been pending for admission and resolution under the IBC.

The meeting also included an evaluation of the operations of the National Asset Reconstruction Company Limited (NARCL). Moving forward, the finance minister will conduct comprehensive reviews of the banks’ performance across various dimensions.

Established in 2021, NARCL is a government entity primarily owned by public sector banks, with private banks holding a minority stake. Canara Bank serves as the sponsor bank. Registered with the Reserve Bank of India as an Asset Reconstruction Company under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, NARCL received government approval in 2021 for a guarantee of Rs 30,600 crore on security receipts.

According to the arrangement, NARCL will pay 15% of the agreed value for non-performing loans in cash, with the remaining 85% guaranteed by the government through security receipts.

In her Budget speech for 2021-22, Finance Minister Nirmala Sitharaman announced the government’s intention to establish a bad bank to address the resolution of approximately Rs 2 lakh crore in bad loans within the banking system.

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