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Need Multiple Bad Banks to Address NPA Issue, CII Tells Govt
News 18The Confederation of Indian Industry has urged the government to consider creation of multiple bad banks to address the adverse impact of non-performing assets accumulated by public sector banks in the recent past, and which have got further accentuated during the pandemic. In its pre-budget memorandum submitted to the government, the industry body has recommended the government to consider enabling Foreign Portfolio Investors and Alternative Investment Funds to purchase NPAs. With huge liquidity, both globally and domestically multiple bad banks can address this issue in a transparent manner and get the credit cycle back in action.” As per the industry body, a robust market-based mechanism will encourage public sector banks to sell their bad loans, without fear of questions being raised later. The best way to achieve true price discovery and better realizations is to open the buy side and enable a clear path for capital to flow for purchase of NPAs, as per the CII.
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