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Last Updated : May 13, 2020 09:12 PM IST | Source: Moneycontrol.com

Business Insight | What is a bad bank and can it resolve the NPA problem?

With the economy facing a downturn and recovery looks difficult, banks wants to take the bad loans off the balance sheets


The bad bank is back on the discussion table. The Indian Banking Association (IBA), the industry lobby of banks, is reportedly considering an asset reconstruction company (ARC)-asset management company (AMC) model to create a bad bank and segregate all bad assets from public sector and private banks into a separate entity. There is no clarity as of now on the final contours of the proposed bad bank and, more importantly, the capital structure.

With the economy facing a downturn and recovery looks difficult, banks wants to take the bad loans off the balance sheets. But what is a bad bank and why banks need it now? What is the actual plan on the bad bank? Will it resolve the NPA issue?

Watch this edition of Business Insight to get all the answers.

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First Published on May 13, 2020 09:12 pm
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