Mumbai: Asset reconstruction company Arcil on Tuesday said it has appointed Pallav Mohapatra as the new chief executive officer and managing director.
Prior to this, Mahapatra was the MD & CEO of Central Bank of India where he was responsible for turning around the bank by overseeing sharp reduction in net bad loans and revamping of working and human resources systems.
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He has also served as the deputy managing director in charge of stressed assets management group at State Bank of India.
The decision to appoint Mohapatra comes at a time when the government is planning to set up a national level asset reconstruction company to clean up banks' balance sheets. Bad loans of ₹500 crore and above will be eligible for resolution by this entity, with an estimated total corpus of ₹2.25 trillion. This bad bank model of ARC is expected to pose competition to the existing players like Arcil, the oldest asset reconstruction company.
As the process to set up the new ARC gathers steam, many banks are also looking to exit Arcil. Punjab National Bank has initiated a sale process to offer its holding, constituting 10% of the paid up equity share capital of the ARC. Other sponsors include Avenue India Resurgence, State Bank of India, IDBI Bank and ICICI Bank.
Arcil is among the top three ARCs based on its assets under management of ₹11,877 crore as of 30 September 2019. The company primarily operates in the corporate segment, which constitutes 83% of the AUM and is increasing its business exposure to SME (12%) and retail (5%) segments.
In fiscal 2019, Avenue India had acquired a 25.03% stake through the secondary market and became the largest shareholder of Arcil. Avenue India is a subsidiary of Avenue Capital, a US-based $10.4-billion fund with expertise in distressed debt.
