The Hindu Business Line : SIDBI planning asset reconstruction co for SMEs

New Delhi, Dec 13 Small Industries Development Bank of India (SIDBI) said on Thursday that it would within the next two months approach the Reserve Bank of India for approval to set up an asset reconstruction company (ARC) targeted at the small and medium enterprises (SME) sector.

“We are in talks with many public sector banks including Punjab National Bank, Canara Bank, United Bank of India to set up an ARC for the non-performing loans in the SME sector,” SIDBI Chairman and Managing Director, Mr R.M. Malla, told reporters here.

He said that the proposed new company would have a capital of Rs 100 crore and SIDBI was looking at 15 per cent stake. In all, about 10 players in the banking and financial sector are to come together for the proposed venture. Mr Malla expressed confidence that the new company would take off in about six months time. The estimated non-performing loans to SME sector by public sector banks stood at about Rs 8,000 crore, he said.

More Stories on : Financial Institutions | SSI | Non-Performing Assets

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