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Lending Re-boot: Bad Bank expected to absorb Rs 2 lk cr NPAs
By IANS |
Published on
Thu, Feb 4 2021 16:06 IST |
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KV Subramanian. (File Photo: IANS). Image Source: IANS News
New Delhi, Feb 4 : India s growth is set to further accelerate on the back of the path breaking plan to set up a Bad Bank , which is expected to absorb Rs 2 lakh crore worth of non-performing assets (NPA).
Accordingly, the process is expected to clean up banks books and allow them to lend more freely.
According to the Finance Ministry s Chief Economic Advisor Krishnamurthy Venkata Subramanian, the crucial reform measure in the sector will pave the way for a stronger banking sector.
Exclusive | Govt won t own or fund Bad Bank’, loans worth Rs 2.25 lakh crore to be shifted to new entity
Stressed assets of Rs 500 crore and above will come under the proposed Bad Bank in the initial phase. Government has initiated consultation with RBI, per top bureaucrats. Lakshman Roy February 02, 2021 / 01:56 PM IST
The government is preparing to bring stressed assets worth Rs 2.25 lakh crore under the proposed ‘Bad Bank’. The entity which will be entirely funded and managed by commercial banks, said two top bureaucrats in an exclusive interaction on February 2.
As per the plan, bad loans above Rs 500 crore will be brought under the entity from 68-70 accounts, they said. The entity will be floated soon.
Budget 2021: What is 'Bad Bank' and why Centre may implement a policy to revive banking sector - The problem of NPAs still looms over the banking sector, and the Centre is thinking about creating a 'bad bank' to resolve the issue.