VCCircle

The government-owned Small Industries Development Bank of India (SIDBI) is planning to set up an asset reconstruction company (ARC) to buy non-performing assets in the SME sector, reports Business Standard.
The ARC, which will have an initial paid-up capital of Rs 100 crore, will be a joint venture with banks like Punjab National Bank, Canara Bank and United Bank. SIDBI is also in talks with other banks, and the JV will see some 10 partners. SIDBI may hold about 15 per cent stake in the company while other partners may hold 5-10 per cent share each. ARC is expected to kick off operations in next six months. It will buy assets from state finance corporation so that they can focus on fresh lending.
The Non Performing Assets in the SME sector are estimated to be around Rs 8,000 crore.