Banks use ARCs for ever-greening: Parliamentary Committee on Finance

Calls for encouraging banks to bring down their leverage, says present "grim situation" should not be used as an alibi for bank privatisation

The Standing Committee on Finance chaired by Lok Sabha member Jayant Sinha observed that banks park their stressed assets with asset reconstruction companies (ARC) to hide the actual extent of bad debts and this should not be encouraged.

At the same time, banks should be encouraged to bring down their leverage and the present “grim situation” should not be used as an alibi for bank privatisation.

“The ARCs have become an instrument to park the non-performing assets (NPA) of banks as simply a window-dressing exercise. The committee would therefore recommend that this policy should not be misused in such a