BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Name the committee, which set up to look into the faster resolution of stressed assets, has recommended the creation of an asset management company for the resolution of stressed loans worth more than Rs500 crore.
A
Rakesh Mohan Committee
B
Sunil Mehta Committee
C
Ghosh Das Committee
D
Subramanian Swami Committee
Explanation: 

Detailed explanation-1: -It has recommended the creation of an asset management company for the resolution of stressed loans worth more than Rs. 500 crore. The committee had also laid out a plan to resolve SME loans within 90 days.

Detailed explanation-2: -Sunil Mehta, a non-executive chairman of Punjab National Bank, was the head of Sashakt Committee. The government had constituted a committee led by Sunil Mehta to resolve the issue of NPAs.

Detailed explanation-3: -It is a specialized financial institution that buys the Non-Performing Assets (NPAs) from banks and financial institutions so that they can clean up their balance sheets. This helps banks to concentrate on normal banking activities. The asset reconstruction companies or ARCs are registered under the RBI.

Detailed explanation-4: -NARCL is one of the two legs of the proposed Bad Bank by the government. The other one is an asset management company called-India Debt Resolution Company Ltd (IDRCL). The NARCL will pick up bad loans above a certain threshold from banks and would aim to sell them to prospective buyers of distressed debt.

Detailed explanation-5: -NARCL is intended to resolve stressed loan assets above ₹500 crore each amounting to about ₹ 2 lakh crore. In phase I, fully provisioned assets of about Rs. 90, 000 crores are expected to be transferred to NARCL, while the remaining assets with lower provisionswould be transferred in phase II.

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