RBI sets up 6-member panel to review ARCs

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The Reserve Bank of India (RBI) on Monday formed a six-member panel under the chairmanship of Sudarshan Sen, former RBI executive director, to undertake a review of the working of asset reconstruction companies (ARCs).

The other members of the committee are ICICI executive director Vishakha Mulye, former SBI DMD PN Prasad, EY partner Abizer Diwanji, MDI professor of economics Rohit Prasad and chartered accountant R Anand.

The committee will review the existing legal and regulatory framework applicable to ARCs and recommend measures to improve efficacy of ARCs. It will submit its report within three months from the date of its first meeting. As of January-end 2021, the number of ARCs registered with the RBI stood at 28.

The panel will also review role of ARCs in resolution of stressed assets including under Insolvency and Bankruptcy Code (IBC), and give suggestions for improving liquidity in and trading of security receipts. It has also been asked to review business models of the ARCs.

According to RBI data, the book value of assets acquired by ARCs stood at Rs 4,31,339 crore and the security receipts issued by them was Rs 1,51,435 crore as of March-end 2020. The amount of security receipts completely redeemed was Rs 17,947 crore.