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

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