India needs a market for distressed assets to resolve bad loans
· Business · Business Standard
India's banking sector faces a growing pile of distressed assets that require a functional market for resolution. Without a transparent mechanism to buy and sell stressed loans, banks struggle to clean up balance sheets. The absence of such a market delays credit flow and hampers economic recovery. Regulators and lenders have long called for a secondary market to price and transfer these assets. Experts argue that a well-regulated distressed asset market would improve bank health and lending capacity. The need has intensified as non-performing assets remain elevated post-pandemic.
Why it matters
A functional distressed asset market would directly benefit Indian banks by reducing their bad loan burden and freeing up capital for fresh lending. It would also help corporations under debt stress by enabling structured resolution instead of prolonged defaults.
Read the original report — Business Standard
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