The Study of FinTech

Abstract

In September 2021, the Government of India approved the extension of a guarantee worth INR 30.6 billion (US$4.1 billion) to the National Asset Reconstruction Company Ltd. (NARCL), also called a bad bank. In a move to address the mountain of NPAs in the banking sector, bad banks may bring some relief to banks or rather defer the crisis. However, historically bad banks have not been successful for countries like Mexico, Greece, South Korea, Argentina, and Italy. Technology can help manage the challenges posed by the mountain of NPAs in the Indian banking sector through emerging technologies like blockchain for transparency and artificial intelligence for streamlined processes. This chapter explains the FinTech way through new emerging technologies to resolve the problem of high non-performing assets and the role of introduction of bad banks to alienate illiquid and risky assets held by banks and financial institutions to clean their balance sheets by transferring their bad loans so that the banks can focus on their core business of taking deposits and lending money.