Correct Answer : P Santhosh
P Santhosh, Chief General Manager at Canara Bank, has been appointed as the Managing Director of National Asset Reconstruction Company (NARCL) with effect from 5th January 2024, succeeding Natarajan Sundar, who resigned from the post. This unexpected change in leadership at the government-promoted asset reconstruction organization has raised eyebrows within the industry.
Resignations in Top Management :
* Natarajan Sundar, a seasoned banking veteran who previously served as Deputy Managing Director at State Bank of India, is the second high-ranking official to resign from NARCL before completing the designated tenure. Last August, Karnam Sekar, the then Chairman of NARCL, also stepped down without providing a specific reason, leaving the organization amid uncertainty.
* Sundar had assumed the role of Managing Director on May 30, 2022, for a two-year term, similar to the tenure of his predecessor, Karnam Sekar. Both resignations occurred before completing the stipulated two-year period, raising questions about the stability and management structure of NARCL.
Merger Proposal and Previous Leadership Changes :
* The surprise resignation of Karnam Sekar was closely linked to a proposal to merge NARCL with India Debt Resolution Company (IDRCL), an entity that acts as a resolution agent. This proposal, initiated by IDRCL’s former head, Diwakar Gupta, prompted Sekar’s resignation. In November, Gupta was appointed Chairman of NARCL, while Narayan Sheshadri assumed the role of Chairman.
* The merger proposal aimed at streamlining the operations of both public sector NARCL and private sector IDRCL, with the former acting as the principal asset reconstruction company and the latter functioning as a resolution agent. However, the unexpected leadership changes have added an element of uncertainty to the proposed merger.
Upcoming Leadership Transition :
With P Santhosh taking over as the Managing Director of NARCL, the organization is expected to invite candidates to apply for the vacant position soon. Santhosh, who joined NARCL on deputation from Canara Bank, will play a crucial role in steering the asset reconstruction company through its mandate of acquiring bad loans and facilitating their resolution.
Financial Overview :
As of November, ten public sector banks had transferred Rs 11,617 crore in bad loans to NARCL. However, the recovery figures indicate a modest sum of Rs 16.64 crore as of November 30, 2023. These financial metrics underscore the challenges faced by NARCL in its mission to alleviate the burden of bad loans from the banking sector.
