Asset Reconstruction Company (India) Limited (Arcil) is the first securitization company and reconstruction company to be registered with the Reserve Bank of India (RBI) under The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) and commence business in India. The business of Asset Reconstruction Companies (ARCs) in India is governed by the SARFAESI Act and the guidelines issued by RBI. Arcil has been sponsored by the significant players in the Indian financial sector, namely State Bank of India (SBI), Industrial Development Bank of India Ltd. (IDBI), ICICI Bank and Punjab National Bank (PNB).
Arcil was established to acquire Non-Performing Assets (NPAs) from the banks and financial institutions with the objective of focused management and optimal recovery, for which Arcil acts as trustee and asset manager. Arcil set out with the vision of being a major contributor to the Indian economy by capturing value from the impaired assets and, towards that end, continuously strives to maximize value through innovative resolution, as also for facilitating development of market for distressed debt. Relieving the banks and financial institutions of the burden of NPAs allows them to focus on their core activities.
In the greater context of the national economy, NPAs represent borrower accounts which are unable to service the capital drawn from the banking and financial system. In other words, capital which should have been available for supporting economic growth remains locked in and dissipates over time, thereby denting the economy. Though the asset reconstruction activity which is being pioneered by Arcil is understood to be an effective facilitator of the financial system, Arcil's broader objective remains unlocking, recycling and channelizing such locked in resources for continued economic development. |
