Need new well-capitalised asset-reconstruction companies, says RBI study

Notwithstanding the increase in the number of ARCs over time, there has been a concentration in the industry in terms of AUM and the security receipts issued

The asset reconstruction sector, where activity is concentrated among the top five players, needs well-capitalised and well-designed entities to strengthen the asset resolution mechanism further, said a Reserve Bank of India (RBI) study.
 
Notwithstanding the increase in the number of asset reconstruction companies (ARCs) over time, there has been a concentration in the industry in terms of assets under management (AUM) and the security receipts (SRs) issued.
 
Of the total AUM, 76 per cent was held by the top five ARCs in March 2020. Furthermore, in terms of the capital base of the industry, the share of top