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Asset Reconstruction Companies:An Analysis of Growth (A Case Study of ARCIL)


Affiliations
1 Department of Commerce, Dr. Harisingh Gour Central University, Sagar, India
2 School of Commerce & Management, Dr. Harisingh Gour Central University, Sagar, India
     

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Asset Reconstruction Companies (ARCs) established under SARFAESI Act 2002, has been proved as one of the most effective curative management strategies in resolving the problem of Non-Performing Assets (NPAs) in Indian Banking Sector. The paper discussed the recovery mechanism of NPAs followed by ARCs and the problems faced by ARCs in India. As ARCs is more capable in resolving the problems of NPAs but the total net worth of all the existing ARCs is not enough to acquire all the stressed assets of Indian banks, there is a huge growth prospects not only for existing ARCs but also for new upcoming ARCs in future. The correlation between the profits of ARCIL and Gross NPAs of banks is depicting a clear picture in this context. Many analysts consider profits earned by ARCs as Money from Junk. Moreover, the paper also highlights the how the New Bankruptcy Code 2016 will bring more opportunities for ARCs.

Keywords

NPAs, SARFAESI Act, Asset Reconstruction Companies (ARC), ARCIL, New Bankruptcy Code 2016.
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  • Asset Reconstruction Companies:An Analysis of Growth (A Case Study of ARCIL)

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Authors

Bharat Kumar Meher
Department of Commerce, Dr. Harisingh Gour Central University, Sagar, India
G. L. Puntambekar
School of Commerce & Management, Dr. Harisingh Gour Central University, Sagar, India

Abstract


Asset Reconstruction Companies (ARCs) established under SARFAESI Act 2002, has been proved as one of the most effective curative management strategies in resolving the problem of Non-Performing Assets (NPAs) in Indian Banking Sector. The paper discussed the recovery mechanism of NPAs followed by ARCs and the problems faced by ARCs in India. As ARCs is more capable in resolving the problems of NPAs but the total net worth of all the existing ARCs is not enough to acquire all the stressed assets of Indian banks, there is a huge growth prospects not only for existing ARCs but also for new upcoming ARCs in future. The correlation between the profits of ARCIL and Gross NPAs of banks is depicting a clear picture in this context. Many analysts consider profits earned by ARCs as Money from Junk. Moreover, the paper also highlights the how the New Bankruptcy Code 2016 will bring more opportunities for ARCs.

Keywords


NPAs, SARFAESI Act, Asset Reconstruction Companies (ARC), ARCIL, New Bankruptcy Code 2016.

References