Government announces guarantee of up to Rs. 30,600 crore to back Security Receipts to be issued by NARCL
Sakshi Education
Finance Minister Nirmala Sitharaman has said that the Union Cabinet approved government guarantee up to 30,600 crore rupees to back Security Receipts to be issued by National Asset Reconstruction Company Limited, NARCL.
Government announces guarantee of up to Rs. 30,600 crore to back Security Receipts to be issued by NARCL
Budget-2021 had announced government’s intention to set up an Asset Reconstruction Company along with Asset Management Company to consolidate and take over existing stressed debt and thereafter manage and dispose them off to buyers for value realization.
Banks’ asset quality review had happened in 2015, for cleaning up and fully provisioning bank balance sheets, this revealed very high incidence of Non-Performing Assets, NPAs. The government then came up with 4R strategy of Recognition, Resolution, Recapitalization and Reforms.
After recognition, quantification of NPAs started in a planned manner and recovery too started.
