Arcil acquires Rs 11,300-cr NPAs

Mumbai, Jan 4 | Updated: Jan 5 2005, 05:30am hrs
Asset Reconstruction Company of India Ltd (Arcil) has acquired non-performing assets (NPAs) aggregating Rs 11,300 crore from 21 banks and financial institutions as on December 31, 2004. This constitutes nearly 12% of the gross NPAs of the banking system.

During the third quarter of the current fiscal, the company put assets worth Rs 2,000 crore on the block, wherein business and asset sale is contemplated.

According to Arcils managing director Rajendra Kakker, We are at different stages of the deal completion, and expect to announce the closures in the last quarter of the current fiscal.

This apart, Arcil has taken possession, under Sarfaesi, of debt aggregating Rs 1,400 crore from three defaulting companies.

Arcil has resolved large cases worth Rs 700 crore of security receipts (SRs), which constitute about 30% of the total SRs issued. The average likely yield on such cases works out to over 15%.

In case of small accounts, ARC has recovered nearly Rs 6 crore, and the money has already been distributed to lenders.

The total SRs issued for acquiring the small cases account for about 4% of the total SRs issued by the company. The total value of SRs issued to banks by the asset reconstruction company (ARC) stood at Rs 2,507 crore as on December 31, 2004.

Of this, the largest chunk has been issued to ICICI Bank at Rs 1,750 crore. The private sector bank recently closed down its internal debt restructuring division, and decided to transfer its NPAs to external asset reconstruction companies.

Apart from ICICI Bank, Arcil issued SRs worth Rs 349 crore to Industrial Development Bank of India (IDBI), while the State Bank group has collectively received SRs, aggregating Rs 260 crore from Arcil.

Of this, Arcil issued SRs worth Rs 236 crore to State Bank of India itself, while State Bank of Hyderabad has received SRs worth Rs 9 crore, State Bank of Mysore (Rs 8 crore)and State Bank of Travancore (Rs 5 crore).

The company has also appointed recovery agents to ensure speedy recovery, said Mr Kakker.