StanChart GM Jaspal S. Bindra in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, Dec. 16: The Reserve Bank of India has approved Standard Chartered Bank’s proposal to set up an asset reconstruction company (ARC).

Talking to The Telegraph, Jaspal S. Bindra, general manager, South East and South Asia, Standard Chartered Bank, said, “We have just received the approval from the central bank. We have already received FIPB nod.”

“We will hold a 49 per cent stake in the company,” Bindra added. The remaining 51 per cent equity of the ARC, which will be set up with an initial capital of Rs 250 crore, will be held by four public sector banks ? Oriental Bank of Commerce, Bank of India, Union Bank and Jammu & Kashmir Bank ? in between them.

StanChart has already floated a special purpose vehicle for the asset reconstruction business. “The company will be set up soon and will start operations at the earliest.”

The bank has recently taken over Rs 300-crore sticky assets from ICICI Bank, which had put its NPAs under the hammer. StanChart put the highest bid and bought out those assets from the auction.

“Our international experience in handling sticky assets will come in handy for the Indian market, too. We hope the NPA market will develop to a great extent in the coming years as more and more banks take steps to clean their books,” Bindra added.