Event Details

Seminar on Enhancing the Effectiveness of Asset Reconstruction Companies

Learning, Policy and Regulation

Tuesday, August 12, 2014
Conference Room, C-7 1st Floor, CAFRAL, Bandra Kurla Complex, Bandra (E), Mumbai. 10:30 AM - 2:00 PM

Introduction

In the context of deterioration in the asset quality of banks in recent years, the Reserve Bank of India had released on its website on January 30, 2014 a ‘Framework for Revitalizing Distressed Assets in the Economy’. The Framework had inter alia, mooted certain steps to enable better functioning of Asset Reconstruction Companies. It has been observed in the Financial Stability Report of June 2014 that there has been a spurt in the sale of NPAs by banks to asset reconstruction companies (ARCs) over the last few quarters. The spurt in the sale of NPAs to ARCs in the last two quarters however point towards the need for a closer monitoring of the efficacy and effectiveness of such mechanism.

Objectives

To discuss the role and responsibilities of ARCs, measures needed to improve their functioning so as to enable them to effectively act as a supportive system for stressed asset management. Also, steps needed for improving the system of valuation of securitization receipts (SRs) would be discussed so as to ensure that SRs reflect the appropriate underlying asset value of stressed assets and sale of NPAs is not used as a tool for artificial balance sheet management. 

*Program participation by invitation only

The program is being conducted for the ARCs, banks, legal and other experts as well as senior officers from RBI.

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