Budget 2021: Bad bank will be a win-win for lenders, says Debasish Panda

All banks are eligible for privatisation. A committee of secretaries will decide which banks will be privatised, said Panda

The asset reconstruction and asset management company will help in resolution of stressed assets worth Rs 2.25 trillion, Financial Services Secretary Debasish Panda said in a post-Budget interaction with the media. Edited excerpts:

On ‘bad bank’

Though commonly known as a bad bank, it is neither bad nor a bank. It’s an ARC-AMC model. If Rs 2.25 trillion worth of stressed assets are sold off through it, then money can be realised and reflect on banks’ balance sheet.

The idea was proposed by the Indian Banks’ Association, and the government decided such an institution was needed as the country grapples with a pandemic.

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