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India to get license for bad bank 'very soon', says DFS Secretary

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India to get license for bad bank 'very soon', says DFS Secretary

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A bad bank is a bank set up to buy the bad loans and other illiquid holdings of another financial institution to clear their balance sheet. The bank then resolves these bad assets over a period of time.

India to get license for bad bank 'very soon', says DFS Secretary
India could get the license for the bad bank very soon, Debashish Panda, the secretary of the Department of Financial Services said Wednesday.
"We expect the license for the bad bank very soon, just a day before the Indian Banking Association has approached the Reserve Bank of India (RBI)," Panda said. The registration of the debt management company is also under process, he added.
The IBA had filed an application in June with the Registrar of the Companies at the ministry of corporate affairs (MCA) to incorporate both the asset reconstruction company and its debt management company.
A bad bank is a bank set up to buy the bad loans and other illiquid holdings of another financial institution to clear their balance sheet. The bank then resolves these bad assets over a period of time. The creation of a new ARC and AMC model was announced in the budget last year.
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