Project Sashakt: Creating a bigger bad asset market is a good idea; but who will do the bankrolling?
6 years, 9 months ago

Project Sashakt: Creating a bigger bad asset market is a good idea; but who will do the bankrolling?

Firstpost  

Should one be excited about the Narendra Modi government’s new bad loan resolution plan, Sashakt? Dumping all bad loans into one entity with no clear resolution plan was like putting together several tiny explosive materials to build a big bomb. On the face of it, the thrust of ‘Project Sashakt’, based on the recommendations of the Sunil Mehta-led panel, unlike ‘Mission Indradhanush’ that focused on several aspects of bank governance, is mainly creating a wider market for the speedy sale or resolution of stressed assets. The problem in bad asset resolution, in India, was always a lack of buyers with deep pockets, who can do the bankrolling for large buyouts of stressed assets. Creating a bigger bad asset resolution market under the proposed Sashakt plan is a good move.

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History of this topic

We need a good NPA market if a bad bank is to succeed
4 years, 2 months ago

We need a good NPA market if a bad bank is to succeed

Live Mint  

In the latest Financial Stability Report, the Reserve Bank of India has stated that the banking sector’s gross non-performing assets could rise from 8.5% at the end of March 2020 to as much as 14.7% by March 2021—a two-decade high. A large proportion of bad debt in terms of value would be on account of big-ticket companies whose dues run …

Opinion | Sashakt will not solve the NPA problem
6 years, 7 months ago

Opinion | Sashakt will not solve the NPA problem

Live Mint  

“When I told my doctor that I couldn’t afford the operation, he offered to touch up my X-rays.” This sort of sums up the thrust of the government-appointed Sunil Mehta committee report for yet another structured solution to the non-performing assets plague afflicting our economy. Sensing this in its asset quality reviews, the Reserve Bank of India coerced all banks …

Bad loans crisis: Nearly 24 lenders sign new NPA resolution framework under Project Sashakt
6 years, 8 months ago

Bad loans crisis: Nearly 24 lenders sign new NPA resolution framework under Project Sashakt

Firstpost  

ICA to aid banks, financial institutions fighting bad loans that are sniffing at 12 percent of the system, to take concerted efforts towards resolving dud loans under Rs 500 crore. Nearly two dozen lenders, led mostly by state-run banks, on Monday, signed the inter-creditor agreement framework to speed up the resolution of stressed assets that are under the Rs 500 …

Mint Primer: What is Project Sashakt and how it will work
6 years, 8 months ago

Mint Primer: What is Project Sashakt and how it will work

Live Mint  

Mumbai: The centre last week accepted Project Sashakt, a five-pronged strategy to resolve bad loans, with the larger ones going to an asset management company or an alternative investment fund. For bad loans of ₹ 50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to …

Project Sashakt: Banks finalise inter-creditor agreement to fast track non-performing asset resolution
6 years, 8 months ago

Project Sashakt: Banks finalise inter-creditor agreement to fast track non-performing asset resolution

Firstpost  

The agreement, a part of Project Sashakt, will be taken to boards of respective banks and would be cleared in a couple of days, said PNB non-executive chairman Sunil Mehta New Delhi: With a view to fast track NPA resolution, bankers on Thursday finalised the inter-creditor agreement framework that envisages effective communication among lenders. The agreement, a part of Project …

Project Sashakt: Five-point formula for resolution of bad loans at PSU banks
6 years, 9 months ago

Project Sashakt: Five-point formula for resolution of bad loans at PSU banks

Hindustan Times  

Finance minister Piyush Goyal unveiled ‘Project Sashakt’, a five-prong strategy to deal with non-performing assets. Goyal clarified that no proposal was put forth to create a bad bank to deal with the rising NPAs, adding that independent AMCs and steering committees would be set up for faster resolution of bad loans in the banking system. The committee of bankers, led …

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