New AMC to tackle large bad loans of PSU banks1 min read . Updated: 15 Nov 2018, 05:59 PM IST
Panel working towards identifying potential investors for an alternate investment fund to fund Sashakt India Asset Management Ltd; talks on with private sector banks
Mumbai: Sunil Mehta, the chairman of a bankers’ panel working on faster resolution of stressed assets in public sector banks, on Thursday said a new asset management company (AMC), Sashakt India Asset Management, will help resolve the problem of large bad loans for state-run lenders.
The panel was now working towards identifying potential investors for an alternate investment fund (AIF) to fund the AMC, he added.
The government had, in July, proposed a five-pronged strategy under Project Sashakt to tackle stress in the banking sector, and had formed a panel led by Mehta, the non-executive chairman of Punjab National Bank (PNB).
Under the project, the committee had to float an AMC and an AIF to resolve non-performing assets (NPAs) over ₹ 500 crore.
“The AMC is making good progress. It has been incorporated and named as Sashakt India Asset Management Ltd," Mehta told reporters on the sidelines of a CII-CFO summit. “We are in the process of identifying potential sponsors, both domestic as well as foreign, who can participate in this."
The committee was in talks with private sector banks to become potential investors in the AIF, he added.
There are currently around 200 bad loan accounts which owe more than ₹ 500 crore each to banks, with a total exposure of about ₹ 3.1 lakh crore.
Talking about the inter creditor agreement (ICA), a part of Project Sashakt, Mehta said 33 banks had signed the agreement so far. ICA is a platform for banks and financial institutions to come together and take concerted efforts towards resolving dud loans under ₹ 500 crore.
He said the committee had already circulated operating guidelines to lenders. “The operating guidelines have been signed by many banks. Once everyone signs them, the entire ICA process will become operational."
The Mehta committee comprises representatives of all major banks, including State Bank of India.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed