
PNB sells entire stake in ARCIL to Avenue India Resurgence
The PSU lender has sold its entire 10.01% stake in the asset reconstruction company in a cash transaction.
The PSU lender has sold its entire 10.01% stake in the asset reconstruction company in a cash transaction.
In FY22, scheduled commercial banks recovered ₹92,564 crore via multiple channels such as Lok Adalats, Debt Recovery Tribunals, IBC, and SARFAESI Act.
FM Sitharaman says ‘India Reset’ has been initiated through tech adoption, not just in software industries but via distribution of common services to citizens as well
With a debt recovery of 20% and liquidation of 29.7% cases, five years on, the Insolvency & Bankruptcy Code is hurting banks, businesses and the economy.
Aided by strong demand recovery, credit ratio rebounds to 1.33 in H2FY21, from 0.54 in H1FY21. GDP could grow at 11% in FY22, but the resurgence in Covid-19 cases is a key downside risk, says CRISIL.
According to a BofA Securities report, the Covid-19 shock could delay India touching the GDP of Japan by three years. In their latest estimates, it will now happen by 2031 if the economy grows at 9%.
Asset reconstruction companies (ARCs) were set up in India to solve the NPA problem. India's 29 ARCs are a reflection of the success of the ecosystem in alleviating the stressed asset challenges.
While Indian banks' improved financial metrics do not fully reflect the impact of the Covid-19 pandemic, the under–capitalised PSBs are likely to remain risk averse and lose market share.
Apart from recapitalisation, public sector banks get a shot in the arm in the form of ARC and AMC mechanisms to clean up their books.
There is a need to make the insolvency system more robust, and the revival mechanism swifter and more efficient. The Budget 2021 may provide a way forward.