National Asset Reconstruction Company may reshuffle accounts on first list

National Asset Reconstruction Company (NARCL) may reshuffle its list of accounts for making binding offers because some of them may be nearing settlement or now have less visibility for resolution in a changing economic climate like price volatility.

While work related to the indicated amount (about Rs 50,000 crore) remains on course, five-six accounts being considered for the first list may not be eligible for transfer, public sector bank executives said.

The situation is changing, especially in the light of volatility in metals.

An asset reconstruction company bases its calculations on the current situation and the potential for recovery.

NARCL has picked up five more accounts from the list of 50 for due diligence before deciding on making firm offers. The entity has missed the first deadline of March 31, 2022, for phase I, where about 15 accounts, totalling Rs 50,335 crore, were expected to be transferred.

A total of 38 non-performing accounts, worth Rs 82,845 crore, were identified for transfer to NARCL in phases.

Under the revised timelines, the company will make a binding offer in the first quarter, which ends on June 30, 2022 (Q1FY23). Together with India Debt Resolution Company (IDRCL), NARCL is engaged in completing the financial and legal due diligence.

A senior bank executive looking after corporate accounts said wherever a bank was stuck with any account or progress was not up to expectations, it could keep the account aside. It is also likely that some accounts may be settled at banks level due to the time taken for transfer. In such circumstances they can pick an account from a list of 50.

First tranche of NPA transfer to NARCL in July

The first set of non-performing assets (NPAs) of about Rs 50,000 crore are expected to be transferred to the National Asset Recons­truction Company (NARCL) in July with account-wise due diligence nearing comp­letion. The remaining accounts are proposed to be taken over by NARCL by October-December. The details about the functioning of NARCL were discussed in a review by Finance Minister Nirmala Sitharaman on Monday.  The NARCL had identified 38 NPA accounts worth Rs 82,845 crore, of which 15 NPAs worth Rs 50,000 crore were to be transferred by March. (BS Reporter)