Global Ratings on Tuesday lauded the proposal to set up a “bad bank” to manage lenders’ troubled assets. “This, alongside a strengthening of the National Company Law Tribunal framework, could in principle benefit banks by ensuring that management bandwidth is not spent on recoveries from weak credits.”
“Likewise, we believe that the resolution of troubled assets could be faster with weak assets consolidated in a single entity, rather than multiple banks negotiating resolution terms,” S&P
Japanese brokerage Nomura
said the positives in the Budget from the rating agencies’ perspective include creation of a bad bank
to house dud debt, increased infrastructure spending, realistic assumptions and greater fiscal transparency, while there are a few negatives as well like weak medium-term fiscal commitment and larger size of the government.
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First Published: Wed, February 03 2021. 00:36 IST