Mumbai: On a humid evening in May, a group of executives from various asset reconstruction companies gathered at the ballroom of hotel President in Cuffe Parade, Mumbai. The third and more recent challenge is the advent of India’s so-called bad bank, the state-owned National Asset Reconstruction Company Ltd. As a rule, the industry thrives when the level of corporate non-performing …
The Indian banking regulator Reserve Bank of India has now allowed banks to transfer stressed loans or which have been classified as NPAs to the asset reconstruction companies. The RBI issued guidelines for transfer of these loans from banks to these companies in September 2021. The RBI, in a master direction issued on September 24, 2021, said, “A robust secondary …
The problem of accumulation of non-performing assets on the balance sheets of banks doesn’t appear to be going away anytime soon, with current moratoriums only providing temporary respite.The deleterious effect on the operation of the banking sector, in particular the revival of credit, is only too well known. An optimal design of the market for NPAs can play an important …
