To streamline the functioning of asset reconstruction companies (ARCs), a Reserve Bank panel has made several suggestions, including creation of an online platform for sale of stressed assets and allowing ARCs to act as resolution applicants during the IBC process. permission is included.
The committee, headed by former RBI executive director Sudarshan Sen, suggested that the scope of Section 5 of the SARFAESI Act be expanded to allow ARCs to acquire financial assets from all regulated entities, including AIFs, FPIs, AMCs. All NBFCs including HFCs. ARC’s performance so far has been weak, both in ensuring recovery and revival of businesses. The lenders could recover only 14.29% of the outstanding amount from the borrowers in respect of stressed assets sold to ARCs during the period 2004-2013. In order to improve the performance of ARCs, RBI had appointed committee to examine the issues and recommend measures to enable ARCs to meet the growing requirements of the financial sector. Stakeholders can send comments on the report to RBI by December 15.
For accounts in excess of ₹500 crore, two bank-approved external assessors should conduct the valuation to determine the liquidation value and fair market value. “Furthermore, the final approval of the reserve price should be given by a high-level committee with the power to approve the respective write-off of the loan,” the report said.
.