Question marks over bad loan plan

Bad loans of over Rs 5 billion will be dealt with through multiple asset management companies

Arvind Subramanian, the outgoing Chief Economic Advisor, thinks India’s bad loan problem can’t be solved in a year or two. Piyush Goyal, the minister in charge of finance, would like to give it his best shot. Mr Goyal has unveiled Sashakt, a five-point plan to resolve non-performing assets. Sashakt is long on intent, short on detail. Besides, solving the bad loan problem is not the same as solving the problem of public sector banks (PSBs) that account for two-thirds of India’s banking sector.

Two of the ideas Mr Goyal has put forward, bank-led resolution and creation of an asset management company