Will 'Bad Bank' Craft Good Banks?

Will ‘Bad Bank’ Craft Good Banks?

Finance Minister, Nirmala Sitharaman has, at last, acted upon one of her many announcements during the 2021 Budget presentation, by declaring the creation of India’s first-ever ‘Bad Bank. It will acquire all the NPAs of a bank at a price that is below its book price. It then will work to recuperate and turn around the assets by way of expert management, sale, or restructuring. How effective would be bad bank to solve the mega problem of NPAs?
Shivanand Pandit answers this big question.