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Bad Bank chairman Karnam Sekar has resigned due to differences over structure and functioning of the institution, reported Economic Times. National Asset Reconstruction Company of India (NARCL) Chairman Sekar resigned on August 19, soon after a proposal for merging public sector NARCL with India Debt Resolution Company Ltd (IDRCL) was suggested.
NARCL managing director N Sunder while confirming the update told Economic Times, “While it is true that Karnam Sekar has resigned from the board of NARCL, those were for strictly personal reasons only. We are absolutely not aware of any recommendations from IDRCL.”
The report notes that the proposal for the merging of two entities first came from IDRCL, headed by former State Bank of India managing director Diwakar Gupta. It was suggested to the Finance Ministry that the two entities should be merged in order to optimize business opportunities and reduce costs.
However, the report notes that the Finance Ministry may not be in favour of this proposal and the status quo is expected to be maintained for the time being.
Under the current structure, NARCL functions as a ‘principal entity’ while the IDRCL operates as a resolution agent. NARCL is tasked with with acquiring and aggregating bad loan accounts from banks, while IDRCL is equipped with handling the resolution process.
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