Why the story of India's so-called 'bad bank' has not been too good so far

The target was for banks to sell Rs 2 trillion worth of non-performing assets (NPAs) to NARCL by 2021-22. Only 10 per cent of this has been executed

Karnam Sanker, the chair­man of the National As­set Reconstruction Com­pany Ltd (NARCL), has quit. Going by reports, his exit has something to do with a proposal to merge NARCL with its “twin”, the India Debt Resolution Company Ltd (IDRCL).

NARCL, the so-called “bad bank”, was set up in July 2021 to buy legacy stressed loans from banks. It is an asset recons­truct­ion company (ARC) that would buy the bad loans at a mutually agreed value and work to recover the debts or associated securities. IDRCL is an asset management company meant to work in tandem with NARCL to help clean