Synopsis: Last month, the Union government set up the National Asset Reconstruction Company Limited (NARCL) under the Companies Act. Two experts, Ajit Ranade and C.P. Chandrasekhar, discuss the bad bank proposal. We list out the key points. Must Read: NARCL: Need and Challenges – Explained, pointwise What is the need to bail out banks? There… Continue reading Will a bad bank fix India’s broken banking system?
Tag: bad bank
RBI permits lenders to sell fraud loans to ARCs, paves way for resolution
Contents1 What is the News?2 What is the current procedure?3 What has changed now?4 Significance of this decision What is the News? The Reserve Bank of India(RBI) has permitted lenders to transfer the loans that have been classified as fraud to asset reconstruction companies(ARCs). What is the current procedure? Currently, RBI norms require banks to… Continue reading RBI permits lenders to sell fraud loans to ARCs, paves way for resolution
Bad bank will help clean up balance sheets, but credit culture must change for healthier financial system
Synopsis: Issues and challenges that may impact the performance of the National Asset Reconstruction Company Ltd. Contents1 Introduction2 How the NARCL will function?3 How it will be beneficial?4 What are the issues and challenges involved?5 What is the way forward? Introduction The balance sheets of banks show stressed loans worth Rs 2 lakh crore. To… Continue reading Bad bank will help clean up balance sheets, but credit culture must change for healthier financial system
Government sets up ‘bad bank’ to clear the NPA mess
Contents1 What is the News?2 What is NARCL?3 What is India Debt Resolution Company Ltd (IDRCL)?4 How will the NARCL and IDRCL work? What is the News? Cabinet has cleared a ₹30,600-crore guarantee programme for securities to be issued by the National Asset Reconstruction Company Limited(NARCL) for taking over and resolving non-performing assets(NPAs). What is… Continue reading Government sets up ‘bad bank’ to clear the NPA mess
Union Cabinet clears decks for National Asset Reconstruction Company
What is the News? The Union Government has approved a proposal that requires the government to guarantee Security Receipts(SR) issued by National Asset Reconstruction Company Ltd (NARCL) when buying non-performing assets (NPAs) from banks. This will clear the path for the launch of National Asset Reconstruction Company (NARCL). Note: Security Receipts (SR) are issued by ARCs… Continue reading Union Cabinet clears decks for National Asset Reconstruction Company
NPA and Bad Bank
Context Finance Minister Piyush Goyal, has announced the formation of a committee to assess the idea of bad banks. What is NPA? NPA or Non-Performing Assets are loans or advances that are in default or are in arrears on scheduled payments of principal or interest, usually for a period of 90 days. Before the period… Continue reading NPA and Bad Bank
