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India Hunts for Solution to Bad-Debt Crisis as Measures Fail

  • India considering setting up state-run manager for bad loans
  • At least two measures have failed to ease bad-debt situation

If at first you don’t succeed, try, try, try and try again. Indian policy makers appear to have adopted the mantra as they mull setting up a state-run fund manager to resolve stressed assets in the banking system after numerous efforts to fix the problem failed.

A “Public Sector Asset Rehabilitation Agency” will help deal with the soured-debt problem that is hindering loan growth and an economic revival, advisers to the nation’s finance minister said last month. It’s an old idea being revived now as India’s stressed loans rise to the highest among major economies.