Question

Q. ‘Twin Balance sheet problem’ is often in the news. It is related to

• A. The balance of payment crisis that India faced during 1991-92.
• B. Overleveraged companies and higher non-performing assets of banks.
• C. Wilful defaulters leaving the country.
• D. Mismatch in assets and liabilities of the Centre and States.

Answer 1

The correct option is B Overleveraged companies and higher non-performing assets of banks.

Explanation:

The twin balance sheet (TBS) problem refers to the burgeoning non-performing assets (NPAs) of public sector banks and overleveraged companies. The overleveraged corporate sector refers to a situation in which companies are under so much debt that they are even unable to pay interest on their debt.