Decks cleared for setting up of Bad Bank, SBI chairman says all approvals received

All approvals for setting up of a bad bank have been received paving the way for its formation, said SBI chairman Dinesh Kumar Khara.

The National Asset Restructuring Company (NARCL) or what is popularly called a bad bank will help lenders in cleaning up their books by acquiring toxic assets and chasing truant borrowers.

The SBI chairman said that around 15 accounts will be transferred to the bad bank in the current fiscal year. A total 38 accounts worth 830 billion rupees identified to be transferred to national bad ban, Reuters quoted him as saying.

The Union Budget last year had cleared setting up of a bad bank which will take over the bad loans from public sector banks and allowing them to focus on more productive lending.

The current structure of the bad bank entails a public sector banks (PSB)-controlled asset reconstruction company (ARC) operating as the bad bank, along with a private sector company engaged in recovering bad loans, spotting credible investors to turn around troubled borrowers.