Under the provisions of Corporate Restructuring Companies Act 2016 with an initial paid-up capital of Rs500 million, 10 banks have decided to establish the Corporate Restructuring Company (CRC) first of its kind company in the country.
The shareholder agreement was signed by presidents and representatives from Habib Bank, National Bank of Pakistan, United Bank, MCB Bank, Allied Bank, Meezan Bank, Bank Alfalah, Bank Al-Habib, Habib Metropolitan Bank and Faysal Bank at the State Bank of Pakistan (SBP) headquarters.
The Securities and Exchange Commission of Pakistan (SECP) has granted license to the PCRCL on Dec 31, 2019. The CRC will help the government revive sick industrial units. The CRCs, under the CRC Act 2016, are empowered to acquire, restructure and resolve the non-performing assets (NPAs) of financial institutions and thereby reorganise and revive commercially or financially distressed companies. The CRCs are specialised institutions with expertise in NPL resolution and corporate restructuring.
SBP is also engaged with the Federal Government to introduce amendments in the relevant laws and to strengthen the Banking Courts in order to take forward Government’s agenda of institutional reforms. It is expected that the CRCs will evolve as vibrant economic agent, contributing towards the revival of sick industrial units and generating employment opportunities.