Life Insurance Corporation, Punjab National Bank, Bank of Baroda and United Bank of India have decided to pick up an aggregate 56 per cent stake in Industrial Finance Corporation of India's Asset Care Enterprise.

"BoB and UBI have joined other banks and financial institutions by picking up 10 per cent each in ACE. PNB will hold 26 per cent, while LIC has picked up 10 per cent in the asset reconstruction company," V P Singh, chairman, IFCI, told PTI after the 10th annual general meeting in New Delhi on Friday.

Also Read IFCI hopes to breakeven this fiscal

IFCI will hold 33 per cent in the new company to be headed by V P Singh.

IFCI's subsidiary, Tourism Finance Corporation of India, will hold the remaining 10 per cent in ACE.

Foreign investors like IFC, CDC and GE Caps are also in talks with IFCI for picking up stakes in the company.

"We are awaiting Reserve Bank of India's licence for the ACE. We are hopeful of starting operation by October this year," he said.

ACE will take up the non-performing assets from banks and strive to recover them faster, taking advantage of the Securitisation and Reconstruction of Finance Assets and Enforcement of Security Interest Act, which enables ARC to take possession of assets of the defaulting companies.

IFCI's ACE will start with Rs 2,250 crore (Rs 22.50 billion) of non-performing assets of IFCI alone, along with the bad assets of other banks and FIs.

The amount would go up gradually as the company's business gathers momentum.

ACE would be running parallel to the Asset Reconstruction Company of India Ltd promoted by ICICI Bank, IDBI, State Bank of India and other private banks.