ARC industry will need to reinvent itself

The RBI unveiled new regulations in October 2022, which enhanced governance standards and permitted ARCs to act as resolution applicants under the IBC's ambit

Photo: Bloomberg

Photo: Bloomberg

R K Bansal
Asset reconstruction companies (ARCs) have their genesis in the Sarfaesi Act, 2002, and corresponding Reserve Bank of India (RBI) guidelines in 2003, starting as an agency dedicated to resolving bad loans. The model was changed with the stipulation of a minimum investment of 5 per cent, which turned it into a low-capital-investment model. While ARCs geared up to raise capital to meet this stipulation, the minimum investment was tripled to 15 per cent in August 2014. This impacted the economics and raised question marks about their ability to raise funds.

However, ARCs and lenders slowly worked out appropriate pricing for
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Feb 26 2023 | 6:04 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers.

Register to