Asset Reconstruction Companies, set up to assist banks and financial institutions in reducing their non-performing assets pegged at over Rs 90,000 crore (Rs 900 billion), are all set to start operations shortly.
"Of the one dozen applications for ARCs, two have got licence from Reserve Bank of India and another -- International Asset Reconstruction Company -- is expected to get it shortly," N S Sisodia, banking secretary, told PTI in New Delhi.
The two ARCs, which have already got licence are Asset Reconstruction Company of India Ltd and Asset Care Enterprise, he said.
ARCIL is promoted by ICICI Bank, IDBI, State Bank of India with 24.5 per cent stake each. ARCIL would start with bad assets worth Rs 7,000 crore (Rs 70 billion) mainly transferred by FIs like IDBI and ICICI.
ACE is promoted by IFCI, Tourism Finance Corporation, Punjab National Bank, Life Insurance Corporation, Bank of Baroda and United Bank of India.
IFCI will hold 33 per cent in ACE, while PNB has picked up 26 per cent with TFCI holding 10 per cent. LIC, BoB and UBI will have 10 per cent each in ACE. It will start with Rs 2,250 crore (Rs 22.50 billion) of NPAs of IFCI alone, along with bad assets of other banks and FIs.
