Budget: ARC to fast-track PSB clean-up, initial capital pegged at Rs 10K cr

In their post-budget media interaction, finance ministry officials said banks will put in capital in the AMC, and the govt will give support, if required

Efforts to clean up banks’ books got a further fillip with the move to set up an asset reconstruction company (ARC) and an allied structure to buy out and turn around stressed assets, particularly of public sector banks (PSBs).

An ARC, and asset management company (AMC) are to be set up to consolidate and take over the banks’ existing stressed debt. They would manage and dispose of the assets to Alternate Investment Funds (AIF) and other potential investors for eventual value realisation, finance minister Nirmala Sitharaman said.

Bankers said while the idea has been around for long, its execution within this financial