Transfer of Bad loans by banks

[vsncas]

Reserve bank of India strongly criticised the mthodology followed by the leading banks SBI, PNB, IDBI bank etc transferring the bad loans ie Non Performance Asset Loans to a company who buys at a discount rate and recover the money from the borrowers. The said asset management company has been formed by these banks only to facilitate the transfer of bad loans. But the asset transferred to this company facilitate the book profit notionally and dress up the financial statements of the respective banks.

The effect of this one will be come to the light very soon with heavy loss to the asset management company. It is purely misguide the public and loss to the public funds.

V.Senthilnathan