BANKING AFFAIRS

Detailed explanation-1: -MUMBAI: US buyout giant KKR & Co has become the first foreign investor to fully own an asset reconstruction company (ARC) in India as it received approval from the Reserve Bank of India at a time when lenders are fighting with a pile of bad loans that have crippled their businesses.

Detailed explanation-2: -The RBI has since stated that ARCs can act as resolution applicants if they have a minimum net owned fund of Rs1000 crore. The regulator has generally requested all ARCs to gradually increase their minimum net-owned fund to Rs200 crore by the end of March 2024 and Rs300 crore by the end of March 2026.

Detailed explanation-3: -Ans. ARCIL was the first Asset Reconstruction Company in India.

Detailed explanation-4: -7. What is Security Receipt? Security Receipt means a receipt or other security, issued by an ARC to any Qualified Buyers (QBs) pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved in securitisation.

Detailed explanation-5: -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.