New Delhi: The upcoming Budget is likely to set out a clear agenda for revival of banking sector, including setting up of a ‘bad bank’ and an aggressive roadmap for recapitalisation, SBI Research said in a note.
State Bank of India said it is “time for a bad bank” as lenders are dealing with close to Rs 6.5 lakh crore of stressed assets. A bad bank purchases or takes over troubled loans and then attempts to restructure and manage these assets in a way that maximises their value. The report noted that the agenda must also include an aggressive roadmap for recapitalisation, bringing down government ownership in PSBs, incentivising public savings, tax breaks for IFSC banking units and making wilful default a criminal offence.
