India’s so-called ‘bad bank,’ which was established to buy historical stressed loans from the country’s institutions, such transactions have recently come to a halt due to disagreements over pricing and future responsibilities, according to bankers and industry sources.

Two bankers and an industry source indicated that stressed assets worth more than 500 billion rupees ($6.03 billion) had been halted from being transferred to the National Asset Reconstruction Co Ltd (NARCL).

NARCL, which started in July 2021 to buy 2 trillion rupees in bad loans, has bought 213.5 billion rupees of such loans as of July 17, according to a government statement to parliament.

But, “so far in this fiscal year, no account has been transferred to NARCL,” said one of the bankers.

“There are issues related to pricing, valuation of accounts, which, along with the delay in obtaining security receipts from the government, is prolonging the entire transfer process,” said another banker at a state-run lender’s stressed assets unit.

While four stressed accounts, including three by IDBI Bank (IDBI.NS), have been transferred to NARCL so far, 12-13 accounts are stuck, “with no resolution in sight,” this banker said.

The sources requested anonymity as they are not authorised to speak to the media. NARCL did not reply to a Reuters email seeking comment.

Bankers said another reason for the stalemate is due to differences over the wording in the loan purchase agreements, especially for fraud accounts.

“NARCL does not want legal liabilities or government investigations after the sale of fraud accounts and wants banks to sign a clause pertaining to that,” another banker said.

“Banks are reluctant to sign such a clause, resulting in more delays.”

Alongside stalled purchases, there have been no recoveries of loans and bankers say they have low expectations going forward.

Bank of India (BOI.NS) has not made any recovery from NARCL accounts, it said late last month.

One banker, however, said that it is too early to judge the success of the asset reconstruction company’s recoveries.

“NARCL being in the market has pushed private asset reconstruction companies to offer a better price,” this banker said.