Informist, Tuesday, May 11, 2021

MUMBAI – State Bank of India's Padmakumar Nair, who is currently the chief general manager in charge of stressed asset group, is set to take charge as the first chief executive officer of the proposed National Asset Reconstruction Co Ltd, a source told Informist.

"The interviews were conducted over the weekend and Nair's name was selected yesterday (Monday). Due to his current role handling a large portfolio of commercial accounts at SBI's stressed assets group, he was seen as a good candidate to lead the bad bank initiative," the source said.

Nair will initially join the role in a part-time capacity before moving there full-time once the bad bank becomes operational, the source said.

The bad bank now called National Asset Reconstruction Co Ltd was announced in the 2021-22 (Apr-Mar) Budget, after such a demand was made by the Indian Banks' Association to help address stressed assets in the financial sector. 

As reported by Informist earlier, the government does not intend to take a stake in the bad bank, but it will provide a guarantee to the security receipts given by the entity, thus reducing the provision and capital burden on such holdings for banks. 

As per media reports, the equity of the bad bank will be held by a consortium of nine banks and two non-bank lenders, so that none of the shareholders hold more than 10%. State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, and Bank of India are among the major banks, while state-owned Power Finance Corp Ltd and Rural Electrification Corp Ltd are the large non-bank lenders touted to hold stake in the bad bank.  End

Reported by T. Bijoy Idicheriah

Edited by Mainak Moitra

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