Even though regulations treat ARCs like bad banks, there is a slight difference in their working. They observed that 70 per cent of the NPL are resold by the bad banks at inflated prices to third parties. Second a bad bank’s purpose must be well defined as mere transfer of NPLs to a bad bank is not a solution in itself. Thus in conclusion, the introductions of bad banks / ARC’s into the Indian economy has its own pros and cons. With the following suggestions taken into consideration bad banks might turn out to be helpful for banks in the removal of NPAs.

Source: Indian Express January 17, 2024 14:13 UTC