Letter to BS: New scheme for NPA resolution detracts from the IBC

This refers to the editorial “Not so Sashakt” (July 6). The classification of the stressed assets into three categories seems a better system for a swift resolution of bad loans. Its efficacy and outcome will depend on the managerial capability and the bank personnel as well as the supporting avenues available in the present legal and administrative set-up. While the National Company Law Tribunal and National Company Law Appellate Tribunal are delivering good results, both will be overloaded with cases pertaining to bad assets for resolution. It is imperative to equip them with adequate capacity to resolve cases in time. Speeding up the whole processes would be crucial here. 

The creation of strong and independent asset management companies with major private participation, the setup of alternative investment funds and a platform for trading the bad assets to accelerate resolution will be of great help in dealing with the mountains of bad loans. Whatever be the means, the ultimate need is to save the banking sector from stressed assets.

V S K Pillai  Vishakam

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