{"id":2431,"date":"2019-12-09T16:47:10","date_gmt":"2019-12-09T11:17:10","guid":{"rendered":"https:\/\/www.classiciasacademy.com\/blog\/?p=2431"},"modified":"2019-12-09T17:07:33","modified_gmt":"2019-12-09T11:37:33","slug":"new-directions-for-arcs","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/new-directions-for-arcs\/","title":{"rendered":"New Directions For ARCs"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">In News<\/h3>\n\n\n\n<p>The Reserve Bank of India (RBI) has issued a\ncircular detailing new guidelines for Asset Reconstruction Companies (ARCs)\nregarding buying bad loans through deals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">In-Detail <\/h3>\n\n\n\n<ul><li>As per the new directions, ARCs\nwill not be allowed to buy non performing assets through bilateral deals where\nthe lender is a sponsor, financier or a group company, <\/li><li>However, ARCs can participate\nin financial assets auctions conducted by the lenders provided the auction prices are determined\nby the market forces and the whole process is conducted in a fair and\ntransparent manner. <\/li><li>Through the new directions, the\nRBI is sending a message to lenders that they cannot engage in financial\nengineering to clean their books by using their liquidity fund to ARCs. <\/li><li>ARCs will takeover the bad\nloans from the books of the banks and recover the money either by selling the\nassets or by getting the business to be back on track.<\/li><li>The directions come at a time\nwhen banks are set to increase the pace of their loan sales and be with good\nnumbers at the end of the year. <\/li><li>Selling NPAs, apart form\ncleaning up books, will help lenders in saving management time. <\/li><li>Due to the current rules of\ninsolvency proceedings, it takes two years of management time for the\nresolution of a stressed asset. <\/li><li>Banks can save this time by\nselling the assets and move on. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">ARC<\/h3>\n\n\n\n<ul><li>An ARC tries to recover the bad\nloans or securities associated with the bad loans at a mutually agreed rate\nwith the lender that is a bank or a financial institution.<\/li><li>All ARCs must be registered\nunder the RBI.<\/li><li>Securitisation and\nReconstruction of Financial Assets and Enforcement of Securities Interest Act,\n2002 (SARFAESI Act, 2002) outlays the regulating mechanism of ARCs.<\/li><li>The ARCs can take over any\nfinancial assistance provided by the banks or financial institutions to recover\nthem. The financial assistance may be loans, guarantees, advances, debentures,\nbonds, and others. <\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>In News The Reserve Bank of India (RBI) has issued a circular detailing new guidelines for Asset Reconstruction Companies (ARCs) regarding buying bad loans through <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/new-directions-for-arcs\/\" title=\"New Directions For ARCs\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[98],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Directions For ARCs - 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