The expansion plan of the mid-sized lender, Yes Bank comes after it raised $1.1 billion last week by selling up to a 10% stake to Carlyle Group and Advent International
The proposed bad bank or NARCL will aggregate bad loans or NPAs in banks' balance sheets and manage as well as dispose them of professionally, the finance minister said.
Updated Jan 19, 2021 | 12:04 IST
Simply put, a bad bank is a financial institution created with the sole purpose of taking on non-performing assets of lenders, enabling them to refresh their books and focus on lending. Representational image.
Key Highlights
The RBI noted in its latest Financial Stability Report that gross NPAs, under a baseline scenario, may rise as high as 13.5 per cent by September 2021, up from 7.5 per cent in September 2020
The concept of a bad bank is not novel but came to prominence during the global financial crisis between 2007 and 2009
Banks, non-financial banking companies and similar institutions are critical components of the economy as they represent formal lines of credit
Updated Jan 12, 2021 | 17:06 IST
Since the RBI had directed banks not to classify any loans that were not already listed as NPAs as of March 1, 2020, lender forbearance has disabled the banking sector from evaluating the true stress. Representational image. | Photo Credit: PTI
Key Highlights
Under the baseline scenario, the RBI had noted that soured loans on banks balance sheets may increase to 13.5 per cent by September 30
The nationwide lockdown imposed by the government in late March 2020 resulted in a marked surge in unemployment, robbing the livelihoods of millions of Indians, forcing them to eat into their savings, and adding unprecedented pressure on borrowers