Bad bank is good for Indian economy: Prof. K Sreerama Murty

He noted that the idea of a bad bank is to buy bad loans and other illiquid holdings of another financial institution and by transferring such bad loans to bad bank, the original institution can clear its balance sheet.

Visakhapatnam: The idea of establishing a bad bank is good for Indian economy in particular as it certainly improves the health of the banking sector, according to noted economist and Andhra University former Principal Prof.K Sreerama Murty.

Addressing review meeting on Budget-2021,organised by the Public Relations Society of India (PRSI), Visakhapatnam Chapter here on Wednesday, he noted that the idea of a bad bank is to buy bad loans and other illiquid holdings of another financial institution and by transferring such bad loans to bad bank, the original institution can clear its balance sheet.

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He said that countries like the US, Finland, Germany and Sweden have successfully experimented with bad asset resolution through a bad bank and this International experience should come in handy for India to model the bad bank. Finance Minister Nirmala Sitharaman had proposed many new measures in the Budget 2021 to prop up the flagging economy amid the Covid-19 pandemic and boost spending across sectors, he stated and hoped that India’s economy would return the expected growth rate in next four to five years because of the present decisions taken by the finance minister and will lift a lot of firms.

PRSI South India Chairman U S Sarma, Visakhapatnam Chapter Chairman PLK Murthy, Vice-President R P Sharma, Secretary MKVL Narasimham, Treasurer NVNarasimham and others participated in the meeting.

 

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