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RBI in action to improve efficiency of ARC’s.

RBI pointed to the dull performance of the existing ARC industry. According to RBI growth of the ARC industry has not been consistent over time and not been in tune with the trends in non-performing assets of banks and non-banking financial companies (NBFCs).Hence RBI had announced of forming a committee under the chairmanship of former ED Sudarshan Sen to have a comprehensive review of the working of ARCs in the financial sector ecosystem.
The panel is expected to review the existing legal and regulatory framework applicable to ARCs and also recommend measures to improve efficacy. Along with this it will also review the role of ARCs in resolution of stressed assets including those under IBC, and give suggestions for improving liquidity in and trading of security receipts.
The RBI is hopeful that the new ARC will strengthen the asset resolution mechanism further.

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