Bad Bank to Come Up Within a Month, Says Financial Services Secretary Debashish Panda
NEW DELHI: The New National Bank for Financing, Infrastructure and Development (BAD) bank to be set up in India within the next one or two months.
Earlier on February 1, Union Finance Minister Nirmala Sitharaman while presenting the budget said that a new Development Finance Institution (DFI) would be set up and will be called the 'National Bank for Financing, Infrastructure, and Development.
The main objective of this bank would be to adequately address the non-performing assets (NPA) crisis of the public sector lenders and the stakeholders will be state-owned and private scheduled commercial banks.
The creation of Bad Bank would allow the banks reeling under stressed assets to clear up their balance sheets, Sitharaman had said during her post-Budget press conference.
Financial services Secretary Debashish Panda speaking to media said that the Bad Bank would function in a 15:85 mechanism. It means that banks will get 15 per cent upfront payment as cash and 85 per cent value as receipts.
"The government is not going to put any money, nor is it going to have any shareholding of Bad Bank," Panda said.
Meanwhile, the government is also considering merging India Infrastructure Finance Company Limited (IIFCL) with the new Development Finance Institution (DFI).