Coming soon, a national asset management company for bad loans

As on March 31, 2018, bad loans across listed banks stood at over Rs 10 lakh crore and the latest Financial Stability Report released by RBI indicates that it may go up further by 2019.

Published: 03rd July 2018 05:57 AM  |   Last Updated: 03rd July 2018 05:57 AM   |  A+A-

Loan

Image for representational purpose only.

By Express News Service

NEW DELHI: The Sunil Mehta committee, which was entrusted with the task of examining the feasibility of setting up a bad bank for faster resolution of bad loans, has proposed a national asset management company (AMC) to take over non-performing assets from banks for resolution of loans above Rs 500 crore.

“A comprehensive and holistic plan on creating credit capacity has been submitted to us by the Sunil Mehta Panel. The panel has presented a balanced and comprehensive project ‘Sashakt’, a five-pronged strategy to deal with stressed assets,” acting finance minister Piyush Goyal told reporters in a late evening media briefing here on Monday after the report was submitted.

The Mehta committee has suggested setting up an AMC with equity contribution from banks, foreign funds and infrastructure funds such as the National Infrastructure Investment Fund.
However, Goyal ruled out any role of the government in the proposed AMC.

As on March 31, 2018, bad loans across listed banks stood at over Rs 10 lakh crore and the latest Financial Stability Report released by RBI indicates that it may go up further by 2019.

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