Home / Companies / News / Stressed firms accuse ARCs of asset stripping in complaint to RBI

Stressed firms accuse ARCs of asset stripping in complaint to RBI

They say ARCs are giving backdoor entry to vulture funds through an effective "benami structure" after taking over debt from banks

Premium

Stressed companies say ARCs are failing to restructure in up to 12 months prescribed by the RBI

3 min read Last Updated : Sep 10 2020 | 11:21 PM IST

Stressed firms have complained to the Reserve Bank of India (RBI) that asset reconstruction companies (ARCs) are indulging in asset stripping with the help of foreign funds.

In a letter to the RBI, one of the stressed companies pointed out that after taking over the debt from banks, ARCs are giving backdoor entry to vulture funds through an effective “benami structure”, which is currently available only for reconstruction or securitisation companies.

Stressed companies say ARCs are failing to restructure in up to 12 months prescribed by the RBI and have asked the central bank whether an unregistered foreign credit fund is allowed

Topics : asset reconstruction companies RBI stressed companies Stressed firms Stressed assets

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in