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Bad Bank

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        Bad Bank to be operational in January           Finance Minister Nirmala Sitharaman proposed to set up a bad bank in the recent Union Budget 2021 considering the ARC-AMC model. The purpose is to consolidate stressed assets into a separate entity Operational from January The bad bank provides dress up the balance sheet of the banking industry. They are set to start their business from the 2nd week of January.  What is Bad Bank? A bad bank is a bank that buys the bad loans of another financial institution. It is created to help banks clear their balance sheets by transferring their bad loans. Banks can focus on their core business of taking deposits and lending money. Set-Up India's bad bank is beginning to take shape. The government recently set up the IDRCL (India Debt  Resolution Company Ltd), an AMC (Asset Management Company) that will work in tandem with   NARCL (National Asset Reconstruction Company) to clean up bad loans. Is bad Bank Good? Bad banks would also give an