RBI awaiting formal proposal on ‘bad bank’ from govt

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Mumbai (Maharashtra) [India], February 5 (ANI): Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday that the central bank is awaiting a formal proposal on the proposed bad bank.

“We are waiting for a formal proposal from the government,” he said in a press conference after the monetary policy announcement.
Besides, said Das, the RBI is also making a deep dive into non-performing assets (NPAs) of each bank to make the sector robust.

In the Union Budget 2021, Finance Minister Nirmala Sitharaman announced the creation of a ‘bad bank’ in the form of an asset management or reconstruction company model to absorb stressed assets in the banking system.

‘Bad bank’ will purchase NPAs from banks at a discount. It will then attempt to achieve resolution in such accounts through a professional approach.

The government plans to bring about Rs 2 lakh crore of bad loans under the proposed bad bank. (ANI)

 

 

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