India needs to create bad bank quickly: Finmin aide

New Delhi (Reuters): India needs to create a bad bank quickly, the finance ministry’s top economic adviser said on Wednesday, supporting forthright views expressed by Viral Acharya, the new deputy governor of the Reserve Bank of India.

Chief Economic Adviser Arvind Subramanian, who has proposed setting up a public asset rehabilitation agency to fix the balance sheets of both struggling banks and indebted companies, said the Government was in touch with the RBI on the matter. Addressing banks’ bad loans is the top priority of the Government, Subramanian told a news briefing, adding that it was important for banks to get political cover to write down debts they are unable to recover.