Top quality talent should be hired at NARCL: Tarun Bhatia

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In order to position, the National Asset Reconstruction Company (NARCL), as a strong independent independent body with high caliber people, it is important to recruit good talent like National Investment and Infrastructure Fund, which has very competent people from the industry, said Tarun Bhatia, Managing Director and Head of South Asia (forensic investigations and intelligence) at Kroll in an exclusive with the Business Standard. He also added that, though it is hiring people seconded from banks at present, the NARCL will have a short shelf life or a long one with no utility.

Speaking about how banks holding 50% stake in NARCL and security receipts issued would be a big material change he said that, when the concept of Asset Reconstruction Companies were introduced in the early 2000s, there was no Insolvency and Bankruptcy Code (IBC). NARCL with IBC(introduced six years ago has a different context as against NARCL without IBC. Had both had been introduced together, that would have been a grave concern. The biggest advantage of NARCL is aggregation.

NARCL would have more teeth than any previous versions of ARCs set up by banks in the past as it is been backed with a government guarantee, he said.

NARCL will not be above banks

When asked about whether banks will have a change of heart while dealing with NARCL to resolve bad assets he said, When NARCL was out of the picture, Inter-Creditor Agreements (ICAs) for resolution of bad assets had challenges earlier, all the banks need to agree among themselves. Now, there is an agency, so if one does an ICA, then the agency takes the call.

As the agency has the benefit of aggregation, its decisions will not be influenced by which bank has had the maximum stake.

He also said that NARCL will not be above the banks and will only act as a pooling agency. However, it has the accumulated debt which gives it a stronger ability to look for investors in the market.