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‘Bad bank’ setup
September 21 , 2021
1153 days
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- The government has set up two new entities to acquire stressed assets from banks and then sell them in the market.
- To make it work, the government has okayed the use of Rs 30,600 crore to be used as a guarantee.
- The NARCL-IDRCL structure is the new bad bank.
- The “National Asset Reconstruction Company Limited” (NARCL) has already been incorporated under the Companies Act.
- It will acquire stressed assets worth about Rs 2 lakh crore from various commercial banks in different phases.
- Another entity is India Debt Resolution Company Ltd (IDRCL).
- Bad Bank are set up to resolve the problem of bad loans which are impacting the public sector banks.
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