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23 ARCs snap up Rs 2.44 lakh crore bad loans from banks so far

Resource constraints at ARCs is also another prime reason for the dip in the sales

Press Trust of India  |  Mumbai 

23 ARCs snap up Rs 2.44 lakh crore bad loans from banks so far

have sold Rs 2.44 trillions of to 23 asset reconstruction companies (ARCs) and despite a surge in stressed assets to around 15 per cent, there was a slowdown in transactions in recent months, says a report.

"Around Rs 2.44 trillion worth of gross have been sold to till now," the report by industry lobby and said on Tuesday.

Even as opportunities are huge-the report has estimated total stock of stressed assets in the system at 15 per cent or Rs 11.80 trillion -- the pick-ups by have suffered since 2015-16, it said.

High incidence of stressed assets, which includes 9.84 per cent gross and 4.2 per cent in restructured assets, is a "matter of concern for the economy", the report said.

One of the reasons for the slowdown is the price mismatch between the expectation of and the under the 15:85 structure, where are paid 15 per cent of the agreed amount on an asset in cash and the rest is paid later through security receipts, it said.

Resource constraints at ARCs is also another prime reason for the dip in the sales, it said.

The number of ARCs kept mushrooming with a complete liberalisation on foreign holding caps and have now touched 23, it said.

It said there has been a surge in capital among ARCs and several new high profile players are expected to in fiscal 2018.

The report also called for a level-playing field for ARCs with banks when it comes to converting debt into equity and incentives for banks to sell dud loans to ARCs so that an ARC can aggregate the entire stock quickly.

First Published: Tue, May 02 2017. 17:52 IST
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