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RBI's order could spell trouble for ARC-owning PE funds, say experts

The RBI had recently rejected a resolution plan - approved by the National Company Law Tribunal in June - that proposed selling Aircel's assets to UV Asset Reconstruction Company (UVARC)

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3 min read Last Updated : Aug 27 2020 | 6:06 AM IST

Private equity (PE) funds owning asset reconstruction companies (ARCs), apart from pure-play ARCs, could land in serious trouble if the Reserve Bank of India (RBI) does not reverse its decision to disallow them from being resolution applicants of a stressed asset under the Insolvency and Bankruptcy Code (IBC).

The RBI had recently rejected a resolution plan — approved by the National Company Law Tribunal in June — that proposed selling Aircel’s assets to UV Asset Reconstruction Company (UVARC).

It was disallowed by the banking regulator on grounds that it was not in conformity with the Securitisation and Reconstruction of Financial

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