Why Budget proposal for setting up of a bad bank is a good idea

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Why Budget proposal for setting up of a bad bank is a good idea
ET Bureau
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Synopsis

Finance minister Nirmala Sitharaman announced an asset reconstruction company (ARC) will be set up to consolidate and take over the existing stressed debt from banks to sell them to alternative investment funds (AIFs) and other potential investors later.

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Sitharaman said the government plans to set up a holding company to which banks can transfer their stressed loans, which can be sold at a market determined price later.

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1 Comment on this Story

MaKo 9 minutes ago
Weak move. Government is too timid to go after the assets and principals behind bad loans. Why would anyone else do it if the government is afraid to do it? Why? Why?