Bad loans essay

A bad bank is a bank set up to buy the bad loans and other illiquid holdings of another financial institution. The entity holding significant nonperforming assets will sell these holdings to the bad bank at market price.

Lack of credit growth, in turn, comes in the way of the economy’s return to an 8% growth trajectory. Therefore, the bad loan problem requires effective resolution. This helps banks or FIs clear-off their balance sheets by transferring the bad loans and focus on its core business lending activities. Large debtors have many creditors.

Indian banks’ pile of bad loans is a huge drag on the economy. It’s a drain on banks’ profits. Because profits are eroded, public sector banks (PSBs), where the bulk of the bad loans reside, cannot raise enough capital to fund credit growth.

Debt is foreseeable but student loan debt can leave borrowers distraught at the mere thought of the unrealistic terms (Hillstrom 55). All students entering college need to be aware of student loans and how they impact the future; either negatively or positively.