Cabinet Clears Proposal For Government Guarantee Of Rs 30,600 Crore For Bad Bank

Union Cabinet has approved proposal for setting up bad bankThe Union Cabinet has approved Central Government guarantee to the tune of up to Rs 30,600 crores to back security receipts to be issued by National Asset Reconstruction Company Limited (NARCL), Finance Minister Nirmala Sitharaman said on Thursday.The Cabinet clearance to the Central Government guarantee was given on Wednesday, she told media persons during a press conference.The Finance Minister said that in 2015, an asset quality review of banks had been conducted, where high incidence of non performing assets (NPA) were revealed.She further informed that in the last six years, the government’s strategy of four Rs, i.e. Recognition, Resolution, Recapitalisation and Reforms helped in recovering Rs 5,01,479 crores.The NARCL will aggregate NPAs in banks’ balance sheets and manage as well as dispose them of professionally, the finance minister said.The licence for NARCL is in the works, she added further.



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