Q. Consider the following statements:

1. National Asset Reconstruction Company Ltd (NARCL) is a ‘bad bank’ for taking over stressed assets of lenders.
2. India Debt Resolution Company Ltd. is an asset management company under the National Asset Reconstruction Company Ltd (NARCL).
3. The public sector banks are to hold 49% stake in the NARCL.
4. The public sector banks and public financial institutions are to hold 51% stake in the IDRCL.

Which of the statements given above is/are correct?
Answer: Only 1 & 2
Notes: NARCL (National Asset Reconstruction Company Ltd.) is a 'bad bank' established by banks to manage stressed assets, with public sector banks holding a 51% stake. IDRCL (India Debt Resolution Company Ltd.) operates under NARCL for asset management, with PSBs and public financial institutions owning 49%. NARCL acquires stressed assets using a 15:85 formula (15% cash, 85% security receipts). A government guarantee covers any shortfall between the realized amount and the security receipt's face value, capped at 30,600 crore INR for five years.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.