CII) has urged the government to consider setting up “multiple bad banks" to address the problem of mounting non-performing assets (NPAs) of state-owned lenders, which has worsened due to covid-led disruptions.A ‘bad bank’ buys the bad loans of other lenders and financial institutions to help clear their balance sheets.“In the aftermath of covid, it is important to find a resolution mechanism through a market-determined price discovery.
With huge liquidity, both globally and domestically, multiple bad banks can address this issue in a transparent manner and get the credit cycle back in action," CII president Uday Kotak said in a statement.Also Read | Inside the rumble in India’s coding jungleThis is the latest proposal on bad banks.