• A bad bank buys the bad loans and other illiquid holdings of other banks and financial institutions, which clears their balance sheet

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• A bad bank is technically an asset reconstruction company that buys bad loans(NPAs) from the commercial banks at a discount and tries to recover the money from the defaulter by providing a systematic solution over a           period of time.
• The idea of a bad bank seeks to reduce the NPAs in the banking sector and then revive lending and credit growth. However, the feasibility of such a bank is highly     debated among various economists.