Indian Bank Exempted to Hold Over 30% Stake in ASREC

New Delhi, Jan 16 (PTI) The government has provided an exemption to Indian Bank to hold shares exceeding 30 per cent in an asset reconstruction company.

According to a gazette notification dated January 12, "the Central Government, on the recommendation of the Reserve Bank of India, hereby, declare that the provisions of sub-section (2) of section 19 of the said Act (Banking Regulation Act), shall not apply to Indian Bank, in so far as they relate to its holding shares of an amount exceeding thirty per cent of the paid-up capital of ASREC (India) Limited".

This exemption would be in force till March 31, 2025, it said.

This notification would come into force with effect from the date of its notification in the Official Gazette, it said.

ASREC (India) Limited was incorporated in October 2004 to carry out activities under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

The company acquires non-performing assets (NPAs) from banks/financial institutions at mutually agreed prices with the objective to maximise returns through innovative resolution strategies.

ASREC positions itself as the multi-lender ARC in the public sector, aiming to earn the confidence of the financial system in the effective resolution of NPAs by operating in a transparent manner with the flexibility of the private sector.

The company's other shareholders are LIC, Bank of India, Union Bank of India, and Deutsche Bank.