A five-member committee appointed by the Indian Banks' Association (IBA) has cleared the name of State Bank of India (SBI) chief general manager (CGM) Padma Kumar Nair to take over as the first chief executive officer (CEO) for the government-approved National Asset Reconstruction Company's (NARC).
According to the top sources, Nair was selected as the preferred candidate by the committee and is likely to get a five-year term. Meanwhile, the SBI has also given its go-ahead clearance on Nair's name.
Nair was promoted as CGM in SBI's stressed asset resolution group (SARG) last year after spending more than three years in the department managing bad loans for the bank. He has a wide experience in bad loan management and this was also instrumental in getting him the top job.
According to the RBI data, the stressed banks have individually cleared Rs 1 lakh crore of legacy bad loans which carry a 100% provision and hence can be transferred to the new NARC immediately.
Nair will be on deputation from SBI for the first few months till the company completes its regulatory process to start operations. He will resign from SBI and join as CEO after the company starts operations most likely in the next couple of months.
Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans.
The NARC will aggregate the bad loans and transfer them to a step-down asset management company (AMC) which will manage the assets for sale. A separate CEO is likely to be appointed for the AMC.