About 89,000 crore worth of non-performing assets (NPAs) have been identified by the banks which are likely be transferred to the upcoming 'bad bank' in the initial phase, reports Economic Times.
The bad bank, called National Asset Reconstruction Company Limited (NARCL), was announced by Union Finance Minister Nirmala Sitharaman earlier this year when she tabled the Union Budget 2021-22 before the Parliament on 1 February.
It is expected that due to the formation of the NARCL, NPAs to the tune of over Rs 2 lakh crore will move out of the books of the banks.
In the initial phase, the banks will transfer around 22 bad loans worth Rs 89,000 crore to the NARCL.
Indian Banks Association (IBA), a representative body of the banks in the country, has asked leading banks to call for meetings and keep an approval ready so that as soon as the NARCL is formed, they can start the process, Union Bank MD and IBA chief Rajkiran Rai G was quoted in the report as saying.
According to the report, Rai said banks have identified the accounts where there are almost close to 100 per cent provisions and are above Rs 500 crore in exposure.