The latest Economic Survey proposed the idea of a public sector asset rehabilitation agency (PARA). The gross non-performing assets (NPAs) in September 2016 reached a high of 9.1% and most of these are concentrated in the books of public sector banks. Acharya, in his speech, highlighted two models of asset management companies—a private asset management company and a national asset management company. Privatization of public sector banks is one big reform that the Narendra Modi government should be targeting. What should the government do to solve the bad debt problem in the banking sector?

Source: Mint March 01, 2017 23:00 UTC