P Santhosh appointed MD & CEO of NARCL

29 May 2024 , 10:25 AM

According to news reports, P Santhosh has been recommended by the board of the National Asset Reconstruction Company (NARCL) to take the position of managing director and chief executive officer of the state-owned bad bank.

Since January, Santhosh has served as NARCL’s acting CEO when N Sundar unexpectedly left the position before the end of his term.

One of the sponsor institutions of the asset reconstruction company is Canara Bank, where Santhosh once held the position of chief general manager.

According to the aforementioned reports, Santhosh has been recommended for a three-year term by the NARCL board.

Senior SBI officials Sundar and Padmakumar Nair were the past two MDs of NARCL.

For the MD & CEO positions, NARCL began accepting applications in mid-April from senior managers with ten years of expertise in stressed asset resolution. NARCL invited applications and said it planned to gradually purchase stressed assets valued at around ₹2 Lakh Crore.

One of the reports stated that shortly after Santhosh assumed leadership as interim head, NARCL actively acquired distressed assets.

NARCL reportedly purchased 18 accounts having ₹92,500 Crore in outstanding loans as of March 31, 2024, according to media sources.

In the last four months, the majority of the accounts were opened. Under the insolvency and bankruptcy process, this also includes the ₹32,000-Crore debt of bankrupt Srei Infrastructure Finance and Srei Equipment Finance.

The only other ARC that accepts offers under the 15:85 structure is NARCL, wherein security receipts (SR) make up 85% of the consideration and cash makes up 15%. Any shortfall in the money that NARCL promises to recoup is guaranteed by the government. The government, however, only guarantees SRs for ₹30,600 Crore, and that amount may only be used in the event that there is a shortfall in redeeming them.

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