The IMF’s Chief Economist Geeta Gopinath has supported India’s idea of creating a bed bank with an estimated economic growth rate of 11.5 percent in 2021.
New Delhi. The IMF’s Chief Economist Geeta Gopinath has supported India’s idea of creating a bed bank with an estimated economic growth rate of 11.5 percent in 2021. Significantly, the IMF has predicted the economic growth rate to be in double digits this year in its latest world economic scenario released on Tuesday. Gopinath said that the Insolvency and Bankruptcy Code should be preferred as there is a possibility of increasing bad loans due to the economic disruption caused by the Corona epidemic, for which Bad Bank is a good idea.
Good idea told about the idea of creating a bad bankIn an interview to CNBC TV18, he said that if we see a 13% NPA going up in the baseline, then it would require a more efficient IBC process. He said that the idea of creating a bad bank is definitely a worthy scheme. In view of the recent circumstances, banks and NBFCs should be encouraged to increase capital. So that the current financial situation can be estimated. Apart from this, the government should also prepare to invest capital in public sector banks.
Before the Union Budget 2021, many experts have put forward the idea of creating a bad bank. Bad bank acts as an aggregator to bring back the existing assets trapped in the system. Being a bad bank, banks are able to focus on their business in general. Since the government dominates the banking system, it is expected that the government should come up with the idea of Bad Bank.
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Expected rapid improvement in economy-This explains the rapid revival in the economy. In the year 2020, it is estimated to fall by 8 percent due to the epidemic. The Monetary Fund forecast an 11.5 percent increase in 2021 in the updated report. In this context, next year, India will be the only country in the big economies whose growth rate will be in the double digits. China will be second in terms of growth with 8.1 percent in 2021. Spain (5.9 percent) and France (5.5) are projected to be ranked thereafter.
