Question

41. Bad Bank was recently in news. Which of the following is correct about Bad Bank?

• A. It is to deal with crisis of Non-Performing Assets
• B. Term was use for old model of banking structure
• C. Banks whose NPA is more than 5% of its assets value
• D. It is for Strategic Debt Restructuring

Answer 1

The correct option is A It is to deal with crisis of Non-Performing Assets

Bad bank could be set up with government money to buy NPA from banks. Bad bank will manage these NPAs in suitable ways-by liquidate, restructuring, losing down plants, selling them off or going to court to resolve these loans etc.