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Tuesday, May 17, 2022
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SBI, Union Bank, PNB Pick Up Stake In NARCL

While SBI and Union Bank of India picked up 13.27 per cent stake each, representing a cumulative 3.88 crore shares in the NARCL, PNB subscribed to 12.06 per cent stake (1,80,00,000 shares).

SBI, Union Bank, PNB Pick Up Stake In NARCL
SBI, Union Bank, PNB Pick Up Stake In NARCL
outlookindia.com
2021-10-01T10:00:55+05:30

Three state-owned lenders -- SBI, Union Bank of India and PNB -- picked up over 12 per cent stake each in the proposed bad bank NARCL on Thursday, and said their holdings will be brought down by December.

While State Bank of India (SBI) and Union Bank of India picked up 13.27 per cent stake each, representing a cumulative 3.88 crore shares in the National Asset Reconstruction Company Ltd (NARCL), PNB subscribed to 12.06 per cent stake (1,80,00,000 shares).

In a regulatory filing on the subscription to 1,98,00,000 shares of NARCL (pending execution of the investment agreement), the country's largest lender SBI said the "investment of equity stake of 13.27 per cent by State Bank of India to be reduced to 9.90 per cent by 31st December 2021".

Union Bank of India, in its regulatory filing, said it has subscribed to 1,98,00,000 shares of NARCL (pending execution of investment agreement). 

The lender said it will bring down its stake of 13.27 per cent to 9.90 per cent by December 2021 on subscription by other public sector banks (PSBs)/ financial institutions.

“Punjab National Bank has subscribed to 1,80,00,000 shares of National Asset Reconstruction Company Ltd (pending execution of investment agreement),” the bank said in a separate filing. 

PNB said it will bring down its stake from 12.06 per cent to 9 per cent by December 31, 2021.

NARCL, which is yet to become operational, will take over the bad assets of banks in its own account for the speedy resolution of sour loans.

All three lenders have subscribed to the equity in NARCL at Rs 10 per share. The completion of the acquisition by them is expected by March 2022.

Earlier this month, the Cabinet cleared a proposal to provide a government guarantee worth Rs 31,000 crore to security receipts issued by the NARCL.

Incorporated on July 7, 2021, NARCL will pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

(With Inputs from PTI)

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