Reserve Bank of India, vide its circular dated 11th October, 2022, considering the critical role of Asset Reconstruction Companies (ARCs) in the management of distressed financial assets of banks and financial institutions, reviewed their functioning and operating framework. As part of the Statement on Developmental and Regulatory Policies released along with the Monetary Policy Statement on April 7, 2021, the Reserve Bank of India had set up a Committee to undertake a comprehensive review of the working of ARCs and recommend suitable measures for enabling them to function in a more transparent and efficient manner.
Further, on Committee’s recommendations and feedback from the stakeholders, the extant regulatory framework for ARCs has been amended as detailed in the Annex of the Circular.
This Circular is applicable to All Asset Reconstruction Companies and shall be effective immediately.
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