InvestorQ : What is the new RBI committee on ARC regulations supposed to do now?
Sam Eswaran made post

What is the new RBI committee on ARC regulations supposed to do now?

Moii Chavate answered.
1 year ago

In the last monetary policy, the RBI government has underlined that they would roll out a detailed plan for the revamping of the existing asset reconstruction companies or ARCs. The RBI has now constituted a 6-member committee to review and restructure all or most of the extant ARC regulations.

The committee will be headed by Sudarshan Sen, who is the former RBI executive director of ED. The committee is expected to submit its detailed report within a period of 3 months of its first committee meeting. For the financial market, this is a much needed shift as there is greater healthy competition among ARCs now.

The agenda for the committee will be a lot more broad-based and all encompassing. Apart from reviewing the existing regulatory and legal framework, the committee will also recommend ways and means to improve the efficacy in the operations of these ARCs. It will also explore and give recommendation on trading of security receipts and their usage.

ARCs were expected to play a major role in debt recovery and restructuring of Indian companies but they have not been successful in this role as was envisaged earlier. The idea of this committee is to bridge this gap between expectation and reality.