Master Circular – Asset Reconstruction Companies
This circular outlines the guidelines and instructions for Asset Reconstruction Companies (ARCs).
Applicability: The guidelines are applicable to all ARCs registered with the Reserve Bank of India.
Definitions: The circular defines key terms such as ARCs, Net Owned Fund (NOF), and financial assets.
Registration and Net Owned Fund: ARCs must register with the RBI and maintain a minimum NOF of:
- ₹100 crore by October 11, 2022
- ₹200 crore by March 31, 2024
- ₹300 crore by March 31, 2026
Permissible Business: ARCs can engage in the acquisition and reconstruction of financial assets.
Asset Reconstruction: ARCs can acquire financial assets from:
- Other ARCs with permission
- Sponsors and lenders
Measures of Asset Reconstruction: ARCs can take measures such as:
- Changing or taking over the management of the borrower’s business
Eligibility and Grounds for Change in or Takeover of Management: ARCs must meet certain eligibility conditions and can effect change or takeover of management on specified grounds.
Chat with the Master Circular:
Download: Master Circular – Asset Reconstruction Companies (Updated as on October 14, 2022)