SBI, Union Bank, PNB pick up stake in NARCL

SBI, Union Bank, PNB pick up stake in NARCL

Three state-owned lenders — SBI, Union Bank of India, and PNB — picked up over 12 percent stake each in the proposed bad bank NARCL on Thursday and said their holdings will be brought down by December. While State Bank of India (SBI) and Union Bank of India picked up 13.27 percent stake each, representing a cumulative 3.88 crore shares in the National Asset Reconstruction Company Ltd (NARCL), PNB subscribed to 12.06 percent stake (1,80,00,000 shares).

In a regulatory filing on the subscription to 1,98,00,000 shares of NARCL (pending execution of the investment agreement), the country’s largest lender SBI said the “investment of equity stake of 13.27 percent by State Bank of India to be reduced to 9.90 percent by 31st December 2021”.

Union Bank of India, in its regulatory filing, said it has subscribed to 1,98,00,000 shares of NARCL (pending execution of investment agreement).

The lender said it will bring down its stake of 13.27 percent to 9.90 percent by December 2021 on subscription by other public sector banks (PSBs)/ financial institutions.

“Punjab National Bank has subscribed to 1,80,00,000 shares of National Asset Reconstruction Company Ltd (pending execution of investment agreement),” the bank said in a separate filing.

PNB said it will bring down its stake from 12.06 percent to 9 percent by December 31, 2021.

NARCL, which is yet to become operational, will take over the bad assets of banks in its own account for the speedy resolution of sour loans.

All three lenders have subscribed to the equity in NARCL at Rs 10 per share. The completion of the acquisition by them is expected by March 2022.

Earlier this month, the Cabinet cleared a proposal to provide a government guarantee worth Rs 31,000 crore to security receipts issued by the NARCL.

Incorporated on July 7, 2021, NARCL will pay up to 15 percent of the agreed value for the bad loans in cash and the remaining 85 percent would be government-guaranteed security receipts.

It will be 51 percent owned by PSBs and the remaining by private-sector lenders. State-owned Canara Bank has expressed its intent to be the lead sponsor of NARCL with a 12 percent stake.

Source: Economic Times

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