 "bad banks, arc, npas, asset reconstructions, loans, banking, finance")
The proposed ‘bad bank’, to be floated by the banking industry, will likely follow the Swiss challenge method for price discovery of assets, sources close to the development said.
This means that even as an asset is transferred to the new asset reconstruction company (ARC) at a pre-agreed price, bids will be called later from others, and the highest bidder will get the asset.
The model also prevents the amendment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (Sarfaesi Act), which mandates a bidding process before the transfer of any asset from banks books, while keeping
