Mumbai: Finance Minister Piyush Goyal Friday said a committee will come out with its recommendations on setting up an asset reconstruction or an asset management company for faster resolution of bad loans. Goyal announced this after a meeting with public sector banks from western and southern region at State Bank of India’s headquarters here Friday.
“A committee has been formed, which over the next two weeks will come out with their recommendations to set up an asset reconstruction company (ARC) and/or an asset management company (AMC) for faster resolution of stressed assets,” Goyal said.
The committee will be headed by Punjab National Bank’s non executive Chairman Sunil Mehta.
The finance minister said the committee will consider whether such an arrangement will be good for the banking system and, if any such suggestion is advisable, it will also consider the modalities by which such an ARC and/or and AMC should be set up.
When asked about the funding for the ARC and/or AMC, Goyal said it was too early to go to that level.
“We will have to wait till the committee has discussed with all the bankers and come up with their recommendations, whether we should look at this as an option, and what should be the structure or modalities of this proposal,” he said.
Finance ministry officials and PSBs discussed issues related to the banking sector, including improving the credit flow, while mitigating risks associated, to further strengthen the growing economy and methods to achieve global standards for the country’s banks.
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