He also said that the panel is now working towards identifying potential investors for an alternate investment fund (AIF) which will fund the AMC.
The government in July has proposed a five-pronged strategy under Project Sashakt to to tackle stress in the banking sector, and had formed a panel led by Mehta, the non-executive chairman of Punjab National Bank (PNB).
Under the project, the committee had to float an AMC and an AIF to resolve non-performing assets (NPAs) over Rs 500 crore.
“The AMC is making good progress. It has been incorporated and named as Sashakt India Asset Management Ltd,” Mehta told reporters on the sidelines of a CII-CFO summit.
He said the committee is now in talks with potential sponsors for the AIF.
“We are in the process of identifying the potential sponsors, both domestic as well as foreign, who can participate in this,” Mehta said without giving any timeline for completion of the process.
The committee is also engaged with private sector banks to become the potential investors in the AIF, he added.
There are about 200 bad loan accounts which owe more than Rs 500 crore each to banks at present, with a total exposure of about Rs 3.1 lakh crore.
Talking about the inter creditor agreement (ICA), a part of Project Sashakt, Mehta said 33 banks have so far signed the agreement.
ICA is a platform for banks and financial institutions to come together and take concerted efforts towards resolving dud loans under Rs 500 crore.
He said the committee has already circulated operating guidelines to all the lenders.
“The operating guidelines have been signed by many banks. The moment the balance of the banks, out of those 33, sign those, the entire ICA process will become operational,” added Mehta.
The Mehta committee comprises representatives of all major banks, including State Bank of India (SBI).