SIDBI to set up asset reconstruction company

Font Size

Print

Feedback

Email

Discuss

Related Articles

Green energy attracts global players'Millionaires to rise in India despite slowdown'3 banks raise non-resident deposit ratesCentre sends out 11.5% rate signal

Lender to small and medium enterprises SIDBI said on Thursday that it will set up an asset reconstruction company along with other banks to recover bad loans in the SME sector with an initial capital of Rs 100 crore.

"We are in talks with many banks, including Punjab National Bank, Canara Bank and United Bank of India to set up an ARC. We will apply to the Reserve Bank in the next two months to get a licence," SIDBI Chairman and Managing Director R M Malla told reporters in Delhi.

Malla hoped that the company will start operations in the next six months.

The new company will have a capital base of Rs 100 crore, in which SIDBI is likely to hold 15 per cent stake, while other 9-10 players will have 5-10 per cent share, he said.

The ARC would be looking at non-performing assets, estimated at Rs 8,000 crore, of the commercial banks in the small and medium enterprises sector.