Such a bank is a good idea at the wrong time since the legacy problem of dud loans is almost over
On Saturday, I listened to the Nani Palkhivala Memorial Lecture that Shaktikanta Das, governor of the Reserve Bank of India (RBI), delivered. He was right to focus on the importance of financial stability and fiscal stability in his speech. In the Q&A session that followed his lecture, he said that RBI was open to considering any serious proposal on the setting up of a “bad bank". In principle, such openness is to be welcomed. However, it may be an option that the government need not have to exercise.