Banks Can List SRs on Bourses

The Economic Times - - Front Page -

Banks will have the op­tion of ex­it­ing the un­sold por­tion of bad loans held as se­cu­rity re­ceipts (SRs) on their books, a move that will help re­solve In­dia’s long-stand­ing dud debt prob­lem. Fi­nance min­is­ter Arun Jait­ley, in his Bud­get, al­lowed the list­ing of SRs on stock ex­changes. When banks sell bad loans to as­set re­con­struc­tion com­pa­nies (ARCs), they get some cash. Against the bal­ance amount, ARCs is­sue SRs, which are sim­i­lar to bonds that can be re­deemed over 5-7 years. Thus, in a way, bad loans sold to ARCs con­tinue to be on the books of banks in the form of in­vest­ments.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.