BANKING AFFAIRS

Detailed explanation-1: -The guidelines permit ARCs to invest in the SRs at a minimum of either 15 per cent of transferors’ investment in the SRs or 2.5 per cent of the total SRs issued, whichever is higher, vis-à-vis the previous requirement of 15 per cent of total SRs issued in all cases.

Detailed explanation-2: -In order to have all current instructions/guidelines on the subject at one place, the Reserve Bank of India issues updated circulars/guidelines. The instructions contained in The Asset Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003 (vide Notification No. DNBS.

Detailed explanation-3: -ARCs are currently not permitted to commence or carry on any business other than that of securitisation or asset reconstruction or the business referred to in Section 10(1) of the SARFAESI Act without prior approval of the Reserve Bank of India.

Detailed explanation-4: -RBI raises Minimum Capital Requirement for setting up Asset Reconstruction Company(ARC) to Rs 300 cr. The Reserve Bank raised the minimum capital requirement for setting up an asset reconstruction company (ARC) to Rs 300 crore from the existing Rs 100 crore.

Detailed explanation-5: -The Reserve Bank of India (RBI) has raised the minimum net owned fund (NOF) requirement of the existing Asset Reconstruction Company (ARC) to Rs 300 crore from the present Rs 100 crore by March 2026.