National Asset Reconstruction Company- Key Facts

The National Asset Reconstruction Company (NARC) has finally become a legal entity registered with the Registrar of Companies (RoC) Mumbai.

Key Points

  • NARC is also called as bad bank is finally here in India. It is considered as a one-stop solution for banking systems stressed assets menace.
  • Under the first phase, 22 stressed accounts amounting to Rs 89,000 cr has been identified to transfer to NARC.
  • With this, Rs 2 lakh cr worth of bad loans accounts will be transferred to newly incorporated bad bank.
  • SBI is expected to transfer bad loans worth Rs 20,000cr.
  • PNB will transfer about Rs 8,000cr stressed assets while,
  • Union Bank of India will transfer about Rs 7,800cr NPAs to NARCL.

About NARC

  • NARC was Incorporated on July 7, 2021.
  • It has an authorised capital of Rs 100 cr and paid-up capital of Rs 74.6cr.
  • Sixteen banks, 12 state-owned and 4 private banks will invest in NARCL.
  • Canara Bank will be sole sponsor of NARL with 12% stake.
  • SBI is going to be second-largest shareholder with 9.9%.
  • NARC will be headed by stressed assets expert from SBI named Padmakumar Madhvani as Managing Director.
  • NARC is having a public sector character.


Indian Banks Association (IBA) had filed an application in June 2021 with Ministry of Corporate Affairs (MCA) to incorporate NARCL and India Debt Management Company (IDMCL) to manage bad loans.

What was the need?

Total stress in banking system is more than Rs 15 lakh crore. So, banks burdened with stressed assets and limited capital find it difficult to manage NPAs. Further, Government can only provide a limited capital. Thus, this bad bank model will help both government and banks to manage NPAs.




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  • Nonymous

    Finally, it is done!!! With this all scams, bank officials who have colluded with promoters etc will all be be whitewashed. After all it is only the public money that has been lost. Fresh scams can now commence.