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Govt Wants RBI to Buy Out Stressed Assets of Shadow Banks

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 29, 2019 4:08 AM 1 min read

Government wants RBI to buy stressed assets of shadow banks. What is a bad bank?



Govt wants RBI to set up a fund to buy out stressed assets of shadow banks.

Could You Help?: As per sources, the government has asked the Reserve Bank of India (RBI) to set up a fund to buy out stressed assets of the country’s top 25 non-banking finance companies (NBFCs).


It has also asked the Central Bank to consider a one time waiver to banks from classifying some real estate loans as bad loans.


The RBI however, has opposed the idea of opening its balance sheet to buy stressed assets of shadow banks. Reuters


Banking Bad: In India, with accumulated bad loans soaring past the INR10L cr mark recently, the idea of setting up a bad bank idea has sprung up time and again, with new and different packaging. Here's all you need to know about a "bad bank".


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