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Letter to BS: Bad bank is a bad idea, will only benefit defaulters

Earlier also, may be more than 15 years ago, there was a private ARC which was stopped for misuse of the system

bad bank | Non performing assets | OPINION

This will be in the nature of an Asset Reconstruction Company (ARC) where the participation of the government would be 50 per cent. Earlier also this idea was floated and the then governor of the Reserve Bank of India (RBI), Raghuram Rajan, had not agreed to it on the ground that the value at which the bad loans would be sold would be difficult to determine.

The so called “hair cut” issue would stall the proceedings. This a highly mischievous and much maligned proposal and not without reasons. Earlier also, may be more than 15 years ago, there was a private ARC which was ...

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First Published: Mon, May 18 2020. 15:28 IST