Independent Research and Policy Advocacy

How to get the Bad Bank off to a good start

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Abstract

Following the announcement in the FY22 budget, India’s first bad bank, the National Asset Reconstruction Company Limited (NARCL) was incorporated last month. With an initial paid-up capital of Rs 74.6 crore, the entity is expected to take over bad assets worth Rs 89,000 crore. Cleaning up bank balance sheets is the first of many steps to resolve the banking system’s non-performing asset (NPA) crisis and the formation of NARCL is expected to be a significant step in that direction.

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