Context: State supported bad bank is a good idea, but it needs to go a long mile for the vision to be realised.
National Asset Reconstruction Company Limited (NARCL): The mechanism offers a bad bank (government-floated asset reconstruction company) with government guarantee for bonds it floats to pay banks while taking over NPAs.
Steps needs to be taken by Government for success Bad Bank
Conclusion: In long term, government shall go for privatisation or merging most public sector financial institutions and retain control over just a few which can perform the role during a situation when national security considerations are underplay.