Union bank

IDRCL: Stakes of Canara Bank, SBI, PNB and Union Bank reduced to 5% each

Four public sector lenders – State Bank of India, Canara Bank, Punjab National Bank and Union Bank of India – said on Thursday their stakes in India Debt Resolution Company Ltd (IDRCL) had fallen to 5% each.

The bad bank or the National Asset Reconstruction Company Ltd (NARCL) will acquire bad debts from the banks to help clean up their books, while the IDRCL will manage the debt resolution process of these loans.

With the current round of preferential allocation by the IDRCL, Canara Bank’s equity stake is now reduced to 5% from the previous stake of 14.90%, the bank said in a regulatory filing.

The reduction in participation is due to the issuance of new shares on a preferential basis to existing shareholders.

PNB’s stake fell from 11.8% while Union Bank’s stake decreased from 12.30% in the debt resolution company.

Public sector banks will hold 51% of the capital of NARCL and 49% of the debt management company IDRCL.

The Indian Banks’ Association (IBA) was given the task of setting up the bad bank. Last month, the IBA applied to the Reserve Bank of India for a license to create the NARCL of Rs 6,000 crore.

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