DESIGNING A ROBUST ASSET MANAGEMENT COMPANY (AMC) FOR REDUCTION OF NON-PERFORMING ASSETS (NPAS) IN BANKING SECTOR
Received: 25.04.2021; Revised: 28.06.2021, Accepted: 05.07.2021, Published Online: 29.07.2021
Dr. Shaleen Kumar Srivastava
Chief Manager – Data Analytics, Central Bank of India, Mumbai, Maharashtra, India
Dr. Pratapsinh Chauhan
Vice Chancellor – Shri Govind Guru University (SGGU), Godhara, Gujarat, India
Abstract— In her Budget speech in February 2021, Indian Finance Minister Nirmala Sitharaman had announced the proposal of setting up a National-level Asset Reconstruction Company (AMC)/ “BAD BANK” in India to reduce the increasing level of Non-Performing Loans. The proposed AMC is expected to take away large NPAs from various Banks and help in faster resolution.
In this paper, we have studied various Bad Bank Models already implemented by various countries. We have analysed various parameters required for designing a Robust Design of a Bad Bank. We have also tried to study various reasons of accounts remaining NPA at Credit Recovery stage and how Automation can reduce the burden of increasing NPAs in Indian Banking Sector.
Keywords – AMC (Asset Management Company), ARC (Asset Reconstruction Company), NPA (Non-Performing Assets), SPE (Special Purpose Entity).