What is a National Bad Bank and how it will work?
Because historically the recovery from bad loans sold to ARCs has been less than 30 per cent of the book value for most of the years. So, analysts would factor in the past record and ascribe value accordingly.
Synopsis
Bankers estimate the new ARC will require a capital of at least Rs 15,000 crore as that could enable it to buy bad loans amounting to Rs 3 lakh crore.
In Budget 2021, the government has proposed a national Asset Reconstruction Company (ARC) to buy non-performing assets from banks. How is it going to be structured? Is it the panacea for banks’ ills? What needs to be done to make it a winning proposition?
At 21% recovery, IBC has performed worse than UPA-era debt recovery mechanisms panned for inefficiencies. The idea of a bad bank is also likely to fail if political interference and poor bank governance continue
Finance Minister Nirmala Sitharaman has called for bigger investments from the private sector.Addressing the national council meeting of an industrial chamber, she said that while the Budget provides
The Budget is strategic, wise, and visionary to turn India into a $5 trillion economy and a message to the world that India no longer plays by the handed over handbook, says Swati Khemani of Carnelian Capital.
Finance Minister Nirmala Sitharaman presented Budget 2021 in the Lok Sabha on February 1
Finance Minister Nirmala Sitharaman said that the key principles adopted by the government for Budget 2021 were transparency and tax stability. The Finance Minister, while addressing top officials at a virtual interaction with industry body - Confederation of Indian Industry (CII), stated that contrary to the expectations of a COVID-19 tax, the government chose to fund the budget stimulus through higher borrowing, rather than increased taxes. Budget 2021 provides for higher capital expenditure by the government, but also seeks private sector participation, which has a significant role to play in growth recovery. (