SIDBI's asset reconstruction arm to get operational in 6 months
SME financing institution Small Industries Development Bank of India (SIDBI) today said its asset reconstruction arm will get operational within next six months.
By PTI |
New Delhi: SME financing institution Small Industries Development Bank of India (SIDBI) today said its asset reconstruction arm will get operational within next six months.
"We will be applying to RBI for approval very shortly and hopefully the ARC will be operational in the next 5-6 months subject to regulatory clearances," SIDBI Chairman and Managing Director R M Malla told PTI.
Asset reconstruction company (ARC) is registered with RBI as Secularisation or Reconstruction Company under the SARFAESI Act for the purpose of carrying on business of reconstruction of banks' non-performing assets.
Malla hoped that RBI approval should come by the end of this month.
A subsidiary has been incorporated called India SME Asset Reconstruction Company (ISARC) with the initial paid up capital of Rs 1 crore, he said.
The company would focus on acquisition of loans to the small and medium enterprises, he added.
The estimated non-performing loans to SME sector by public sector banks stood at over Rs 8,000 crore.
The industry sold about Rs 4,000 crore of NPAs in 2006-07. Of the estimated Rs 1,00,000 crore of bad assets in the system, less than a third have gone off the book in the last few years.
SIDBI, as a lead partner, have about 26 per cent stake in the company. Remaining stake is distributed among 10 public sector banks, LIC and two state finance corporations.
"We have got some very good partners like Punjab National Bank, Bank of Baroda, Canara Bank and United Bank of India," he said.
"We will be applying to RBI for approval very shortly and hopefully the ARC will be operational in the next 5-6 months subject to regulatory clearances," SIDBI Chairman and Managing Director R M Malla told PTI.
Asset reconstruction company (ARC) is registered with RBI as Secularisation or Reconstruction Company under the SARFAESI Act for the purpose of carrying on business of reconstruction of banks' non-performing assets.
Malla hoped that RBI approval should come by the end of this month.
A subsidiary has been incorporated called India SME Asset Reconstruction Company (ISARC) with the initial paid up capital of Rs 1 crore, he said.
The company would focus on acquisition of loans to the small and medium enterprises, he added.
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The estimated non-performing loans to SME sector by public sector banks stood at over Rs 8,000 crore.
The industry sold about Rs 4,000 crore of NPAs in 2006-07. Of the estimated Rs 1,00,000 crore of bad assets in the system, less than a third have gone off the book in the last few years.
SIDBI, as a lead partner, have about 26 per cent stake in the company. Remaining stake is distributed among 10 public sector banks, LIC and two state finance corporations.
"We have got some very good partners like Punjab National Bank, Bank of Baroda, Canara Bank and United Bank of India," he said.
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