Consider the following statements with respect to the National Asset Reconstruction Company Limited:

Which of the above statements is/are correct?

1 only

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1 and 2 only

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1 and 3 only

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1, 2, and 3

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Solution

The correct option is A
1 only

Statement 1 is correct: NARCL has been incorporated under the Companies Act and has applied to the Reserve Bank of India for a license as an Asset Reconstruction Company (ARC). NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution.

Statement 2 is incorrect: Public sector banks will hold 51 percent ownership in NARCL.

Statement 3 is incorrect: A government guarantee worth Rs 30,600 crore will be provided to security receipts issued by NARCL. The guarantee will be valid for a period of five years.

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