BANKING AFFAIRS

Detailed explanation-1: -An Asset Reconstruction Company is a specialized financial institution that buys the NPAs or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. In other words, ARCs are in the business of buying bad loans from banks.

Detailed explanation-2: -Association of ARCs in India is a Representative Body of 28 Asset Reconstruction Companies registered with Reserve Bank of India.

Detailed explanation-3: -As part of the SARFAESI Act, ARCs were set up as another institutional alternative for NPA resolution in India. The ARCs, regulated and supervised by the Reserve Bank, were institutions created for the sale of financial assets by banks and financial institutions. borrowers.

Detailed explanation-4: -Asset Reconstruction Companies are registered under the RBI and regulated by the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act 2002).

Detailed explanation-5: -ARCs play a vital role in the management of distressed financial assets of banks and financial institutions. Considering their critical role, a need was felt to review their functioning and operating framework.