Asset Reconstruction Companies

In April 2024, the Reserve Bank of India (RBI) issued the Master Direction – Reserve Bank of India (Asset Reconstruction Companies) Directions, 2024 under the SARFAESI Act, 2002.

  • These directions apply to all RBI-registered ARCs, ensuring transparency, accountability, and integrity in the financial system.

Role of ARCs in NPA Resolution

  • ARCs acquire non-performing assets (NPAs) from banks and financial institutions for resolution within eight years.
  • The concept was introduced by the Narasimham Committee – II (1998), and India currently has 29 ARCs, including NARCL and IDRCL.
  • ARCs acquire financial assets from banks and issue security receipts (SRs), redeemable upon loan recovery.
  • They charge a ....
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