Bad Bank

Syllabus- General Studies 3 (economy) Context As India gets ready to operationalise a new bad bank, China is struggling with one of its biggest bad banks, the China Huarong Asset Management Co. Ltd. (Huarong). Recently, it skirted a potential bond default. Bad bank A bad bank is technically an asset reconstruction company that buys bad loans(NPAs) from the commercial banks at a discount and tries to recover the money from the defaulter by providing a systematic solution over a period of time. The idea of a bad bank seeks to reduce the NPAs in the banking sector and then revive....Read More