The Reserve Bank of India is open to investigate any proposal to set up a bad bank, Governor Shaktikanta Das said, days after the authority forecast an increase in souvenir assets.
“If any proposal comes we are open to examining it and issuing the regulatory guidance but it is up to the government and private sector players to plan for it,” said Das, following a speech on sustainability. in the finance department Saturday. “If there is a proposal – point out my words – if there is a proposal to set up a bad bank, RBI will look into that.”
The State Bank of India, the country’s largest lender, and peers are considering a possible proposal, said Rajnish Kumar, who was in charge of the bank at the time. May. Economic Affairs Secretary Tarun Bajaj said last month that the government is exploring all options including setting up a bad bank to improve the health of the country’s financial sector.
Previously, bank regulators had not supported the idea because state lenders hold the majority of souvenir funds. The banking sector’s bad loan ratio is expected to rise to 13.5% by September from 7.5% a year ago as the pandemic slowed in the economy.
– Supported by Anirban Nag