Lesson from China on bad banks

Relevance: There is a debate going on in India to open bad bank for solving the NPA problem with banks.  Synopsis – To address stressed assets [nonperforming loans (NPLs), a bad bank must have a fixed term and a narrow mandate with clear aims.  What are bad banks?  A ‘bad bank’ is designated financial institutions that purchase and resolve nonperforming assets (NPAs) from banks and help… Continue reading Lesson from China on bad banks

Asset Reconstruction Company – Concepts Simplified | Prelims Capsules 2021

The concept of Asset Reconstruction Company is very important for UPSC exam due to the proposal of setting up bad banks. This proposal was put forward by the government in the recent Union Budget 2021-22. What is an Asset Reconstruction Company (ARC)? Asset Reconstruction Company (ARC) is a specialized financial institution that buys the Non-Performing Assets… Continue reading Asset Reconstruction Company – Concepts Simplified | Prelims Capsules 2021