After deliberations it was decided not to adopt this approach. Instead banks were required to deal with all the non-performing assets themselves and it is clear from the performance indicators above that this strategy has been effective. Fiscal support has not been burdensome and legacy problems such as non-performing loans have been absorbed by banks and not transferred to fisc.
Although subsequently the Government passed a legislation to create a new category of companies called Asset reconstruction companies, it must be noted that these entities are private commercial entities and work on a commercial basis to deal with distressed assets.