Q.3 The newly-created National Asset Reconstruction Company (NARCL) in the public sector offers hopes for the faster clean up of lenders’ balance sheets. In light of this, examine the scope of its success and challenges it may face in achieving its objectives. (10 Marks)

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2 responses to “Q.3 The newly-created National Asset Reconstruction Company (NARCL) in the public sector offers hopes for the faster clean up of lenders’ balance sheets. In light of this, examine the scope of its success and challenges it may face in achieving its objectives. (10 Marks)”

1. 

   November 30, 2021

   project _osiris

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   1. 

      December 5, 2021

      Staff @CD

      Hello

      Very generic answer; in intro mention gross NPA%, according to RBI’s financial stability report it was found to be 7.5% as of March 21.
      Again in successes, your main argument is it will help in resolving NPAs..that is true..but mention how..talk about the differences in previous mechanisms and newly formed NARCL- faster aggregation of distressed assets that lie scattered across several lenders; its securitised receipts (SRs) carry sovereign assurance; price discovery would not be subject to later investigations; would initially focus on large accounts with debts over Rs 500 crore; expected to free the banks from the tortuous recovery process and afford them more space to focus on much-needed credit expansion- these points should be mentioned.
      Challenges mentioned are fine- again you can mention some specifics such as low cost of acquisition of distressed assets.
      You need to be a bit specific in economics questions..writing generic points will give very average marks..need to work a bit on the content. Go through the article for content building.
      Conclusion is fine; keep practicing. 🙂