RBI's revised ARC norms improve governance; may shake up industry

Three players -- JM Financial ARC, Edelweiss ARC, and ARCIL -- have a dominant presence in the sector with a sound capital base and management bandwidth

The Reserve Bank of India's (RBI’s) revised norms for asset reconstruction companies (ARCs) will raise the bar for governance and disclosures, and may also trigger a shake-up in the ARC industry comprising 29 players due to enhanced capital requirements and stringent diligence.

R K Bansal, MD & CEO, Edelweiss ARC said: “The RBI’s amendment of the regulatory framework for asset reconstruction companies will strengthen the overall functioning of ARCs. It provides for lower minimum investment thresholds, similar to AIF structures, flexibility in the investment of liquid funds, participation in insolvency process as an RP, along with enhanced governance framework.”

Echoing