The new framework for non-performing assets (NPAs) will allow state-owned banks to conduct open auctions of NPAs, wherein cash-rich public sector companies will be encouraged to buy such assets in their sector. The new framework to deal with Rs 6 lakh crore worth of toxic assets was approved by the Cabinet on Wednesday.

It contains a set of fresh guidelines for public auction of assets by public sector banks (PSBs) for the steel and power sectors, which account for a majority of toxic assets. The NPA framework includes an Ordinance to amend the Banking Regulations Act to give more ...