Four top private banks – HDFC Bank, ICICI Bank, Axis Bank and IDBI Bank – have agreed to pick up 9.9% each of India Debt Management Co (IDMCL), the entity that will assist the National Asset Reconstruction Company (NARCL), the proposed bad bank, which will take over identified bad loans of lenders and pay up to 15% of the agreed value of loans in cash and the remaining 85% in government-guaranteed security receipts. NARCL will have predominantly public sector ownership, while IDMCL will be majority owned by private sector banks, Canara Bank will be the lead sponsor of NARCL with a 12% stake. NARCL has already been incorporated, with the Corporate Affairs Ministry giving legal recognition few days ago, and is expected to approach the Reserve Bank of India for obtaining licence as an asset reconstruction company. The other banks that are expected to bring in capital include State Bank of India, Bank of Baroda, Bank of India and IDBI Bank.
