Stressed assets of about Rs 2 trillion to be acquired in phases
Having several routes for NPA resolution has both advantages and disadvantages as the decision will finally be taken by the banks
Approves government guarantee on security receipts that will be used to buy bad loans of lenders
The capital funding structure would follow a debt and equity ratio of 1:1, according to the proposal
It is expected that NPAs over Rs 2 trillion will move out of the books of the banks to the bad bank
CoC to meet today as NBCC sweetens Jaypee Infra offer
Without beefing up the regulatory framework, moral hazard may outweigh advantages, say experts
The idea of a bad bank has been around for some time now though it was abandoned at one point
Most of the assets picked up by ARCs are corporate loans
Banks want to dispose of the assets at a deep discount, but for upfront payments
The selling ARC should use the proceeds for the redemption of underlying security receipts.
Recently, CVC suggested that banks have a monitoring mechanism for bad loan sales to ARCs, with the cash flow statement from stressed assets shared with banks, according to top bankers in PSBs