<p>The finance ministry on Friday said there is no decision taken on the proposal of setting up of a government-sponsored bad bank to help ease pressure on lenders with regard to non-performing assets (NPAs) which are likely to witness a surge due to the COVID-19 crisis.</p>.<p>Even the Economic Survey 2017 had proposed this idea, suggesting the creation of a bad bank called Public Sector Asset Rehabilitation Agency (PARA) to help tide over the problem of stressed assets.</p>.<p>Lenders have been making a case for setting up a bad bank to ease out pressure of bad loans on them in these difficult times.</p>.<p>According to a senior official of the finance ministry, the proposal was discussed during the Financial Stability and Development Council (FSDC) meeting on Thursday.</p>.<p>However, no decision has been taken on the issue, the official added.</p>.<p>Currently, banks sell their bad loans to asset reconstruction company (ARC) as per the prudent norms of the Reserve Bank of India.</p>.<p>SBI Chairman Rajnish Kumar had said "we believe that this is the right time where a structure along the lines of a bad bank can be worked out because the provisions on the existing NPAs -- most of the banks are holding a very high level of provisions.</p>.<p>"So a bad bank 3 years ago was not feasible, because the provisions were inadequate. So at least today we have the adequate provisions and net book value is hardly 10-15 percent of the gross NPAs," he had said.</p>.<p>Meanwhile, the finance ministry official while talking about a curb on foreign portfolio investment (FPI) from China said "the government has not taken a call on that".</p>.<p>Last month, the government decided to put restriction on foreign direct investment (FDI) to clamp down on the investor from China to buy Indian companies cheap.</p>.<p>The amendments to the FDI rules were necessitated by the fear among officials as well as businesses about possible takeover attempts by Chinese companies — sitting on piles of cash — of Indian entities where share prices had fallen after the outbreak of the COVID-19 pandemic.</p>
<p>The finance ministry on Friday said there is no decision taken on the proposal of setting up of a government-sponsored bad bank to help ease pressure on lenders with regard to non-performing assets (NPAs) which are likely to witness a surge due to the COVID-19 crisis.</p>.<p>Even the Economic Survey 2017 had proposed this idea, suggesting the creation of a bad bank called Public Sector Asset Rehabilitation Agency (PARA) to help tide over the problem of stressed assets.</p>.<p>Lenders have been making a case for setting up a bad bank to ease out pressure of bad loans on them in these difficult times.</p>.<p>According to a senior official of the finance ministry, the proposal was discussed during the Financial Stability and Development Council (FSDC) meeting on Thursday.</p>.<p>However, no decision has been taken on the issue, the official added.</p>.<p>Currently, banks sell their bad loans to asset reconstruction company (ARC) as per the prudent norms of the Reserve Bank of India.</p>.<p>SBI Chairman Rajnish Kumar had said "we believe that this is the right time where a structure along the lines of a bad bank can be worked out because the provisions on the existing NPAs -- most of the banks are holding a very high level of provisions.</p>.<p>"So a bad bank 3 years ago was not feasible, because the provisions were inadequate. So at least today we have the adequate provisions and net book value is hardly 10-15 percent of the gross NPAs," he had said.</p>.<p>Meanwhile, the finance ministry official while talking about a curb on foreign portfolio investment (FPI) from China said "the government has not taken a call on that".</p>.<p>Last month, the government decided to put restriction on foreign direct investment (FDI) to clamp down on the investor from China to buy Indian companies cheap.</p>.<p>The amendments to the FDI rules were necessitated by the fear among officials as well as businesses about possible takeover attempts by Chinese companies — sitting on piles of cash — of Indian entities where share prices had fallen after the outbreak of the COVID-19 pandemic.</p>