<b>A V Rajwade:</b> The nagging bad debt problem

It's not just crony capitalism and dishonest businessmen who are responsible for NPAs in PSBs

Last Friday, Finance Minister Arun Jaitley and senior officials in his ministry had a conference with the governor of the Reserve Bank of India (RBI) and its senior executives to discuss how best to tackle the problem of bad debts or non-performing assets (NPA), and the possible formation of a “bad bank” to mitigate it. The idea of a “bad bank” with significant government shareholding was mooted in the pre-Budget Economic Survey, and has subsequently been commented upon also by RBI Deputy Governor Viral Acharya.    

The problem is not new, but so far it seems to have produced