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India plan won't quickly resolve bad debts, official says |
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May 9, 2000
CHIANG MAI, MAY 8 (AP) - India's plan to establish an asset management company to resolve bad bank debts and spur new lending won't mean a quick resolution of debt problems, an official said Monday.
E.A.S. Sarma, a top official at India's finance ministry, said that the country's levels of non-performing bank loans were not as high as in many Southeast Asian countries, "but we are mindful" they need to be reduced.
Sarma was speaking at a seminar on the final day of the annual meeting of the Manila-based Asian Development Bank.
Asset management companies, generally organized by finance ministries and central banks, have been a common solution for many Asian governments seeking to unburden their banks to make new loans and spur economies after the regional crisis of 1997.
But Sarma said that merely moving bad bank loans to an asset management company isn't the final fix, since write-offs will need to follow.
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