State-run banks who are working on the ‘bad-bank’ want private companies, including asset managers, to own a 51 per cent stake in the asset management company (AMC). However, private entities with any links to the bad assets housed in the AMC will not be permitted to invest, the report said.
State-run banks want the private sector to own the majority of the AMC to enable flexibility in decision-making. Also to avoid the purview of the three Cs: Central Bureau of Investigation (CBI), Comptroller and Auditor General of India (CAG), Central Vigilance Commission (CVC), sources said.
The plan for a bad bank was proposed during the Union Budget 2021. The entity will absorb stressed assets of lenders and will be set up as an asset reconstruction company (ARC)/AMC.
