NARCL: IRARC’s Avinash Kulkarni to head India Debt Resolution Company

Mumbai: Managing Director of the India Resurgence Asset Reconstruction Company (IRARC), Avinash Kulkarni, has been chosen to lead the India Debt Resolution Company (IDRCL) which will be the sole agent to resolve over ₹83,000 crore of bad debts to be acquired by the government-backed National Asset Reconstruction Company (NARCL).

“Kulkarni was selected from a shortlist of approximately six candidates earlier this month. With this selection, key executives are in place to begin consolidating banks’ bad debts through NARCL,” a person with direct knowledge said. of development.

The IDRCL Board has approved his appointment.

Kulkarni is an (SBI) veteran, having held various positions with the public sector giant. His engagements with the SBI Group have included assignments in the investment banking and advisory arm, Capital Markets.

He joined

and IRARC promoted by Bain Capital in 2018. “He has experience in resolving distressed assets – both at SBI and also at IRARC – and is an experienced banker. He was thought to be best suited for the job,” said a second person with knowledge of the matter. . Kulkarni could not immediately be reached for comment.

Kulkarni’s appointment follows the selection of another SBI veteran, Natarajan Sundar, as CEO of NARCL in April. Sundar took over as CEO at the end of May.

The two appointments now mean that the key executive leadership to lead the government-backed ARC is in place.

The establishment of a bad bank was a key reform measure of the 2021 budget and it was incorporated in June 2021. The IDRCL, the principal agent of the NARCL, will be in charge of the resolution. It will not have a balance sheet and will only play the role of facilitator for the resolution of these loans.

“Being only an agent of NARCL, IDRCL does not need to have the appointment of its CEO approved by the RBI, unlike in the case of NARCL. Kulkarni will serve a three-year term as CEO He should take over as early as next month,” the first person quoted above said.

IDRCL is a private sector company controlled by private sector banks which hold a 51% share. Its seven-member board is chaired by former SBI leader Diwakar Gupta. The current CEO and former head of the vertical alternative investment fund of SBI Mutual Fund, Manish Makharia, will make way for Kulkarni.

NARCL will now formally issue banks with an offer for each of these accounts which will then be subject to a Swiss challenge to ensure transparent price discovery. NARCL will acquire the assets at 15% in cash with security receipts issued for the remaining 85%, for which the government has approved a five-year guarantee of ₹30,600 crore which will support the banks in the event of lower realisations.


Comments are closed.