The reserve bank of India's plans to set up a new entity to buy up bad loans from ailing public sector banks have been met with initial scepticism from several observers. In a speech last week, RBI deputy governor Viral Acharya outlined plans to create a new agency that would buy and restructure bad loans, mostly from public sector banks. His comments echoed proposals outline earlier in the week in the government's latest economic survey, which raised the possibility of creating a Public Sector Asset Rehabilitation Agency to handle the most complicated cases.
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