New Delhi (IANS) The Assocham has advocated the formation of 'Stressed Assets Funds' (SAFs) to revive non-performing assets (NPAs) in banks. The formation of SAFs will complement the government's and RBI's recent steps to tackle stressed assets, it said. The industry body elaborated that SAFs should be created through active participation of cash rich public sector firms to revive highly-leveraged assets.
"Some cash-rich public sector companies can be encouraged to participate either in the SAFs or take over some of the assets where the present promoter wants to exit," Assocham said. "With green shoots in several sectors, this could even be an opportunity for the government or Special Purpose Vehicles to buy assets at much lower valuations."
"Once these assets are brought back to shape, the paybacks to SAF can take place. Different forms of the SAFs can be thought of, including some of which can be neutral to creating a hole in the government finances," the statement elaborated.