Indian lenders pitch for govt-funded ‘bad bank’

MUMBAI: Indian lenders want the government to provide up to US$2bil to set up a “bad bank” at a time when their heavy pile of soured debt is expected to double in size due to the Covid-19 pandemic, according to two sources with knowledge of the matter.

The banks have proposed that the government set up an asset reconstruction company (ARC) to initially buy non-performing loans worth up to a total of one trillion rupees (US$13.3bil), the banking industry sources told Reuters.