Freeing Up Banks
Feb 04, 2021
3 minutes
BY ANAND ADHIKARI
ILLUSTRATION BY RAJ VERMA
he outbreak of Covid and the resulting lockdown threatens to start a new non-performing asset (NPA) cycle that will further hit banks, especially public sector banks (PSBs), which have been finding it almost impossible to lend for long gestation projects because of asset-liability mismatches. The Budget proposals to set up an asset reconstruction company (ARC) and an asset management company (AMC) to house NPAs, apart from a development finance institution (DFI), are aimed at easing the burden of banks and getting the funds-starved infrastructure sector to fire on all cylinders.
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