Of the total AUM, 76 per cent was held by the top five ARCs in March 2020. Furthermore, in terms of the capital base of the industry, the share of top five was 67 per cent, according a study released as part of RBI’s April 2021 bulletin.
Despite the policy push to broaden and enhance the capital base of these companies, they have remained reliant primarily on domestic sources of capital, particularly banks, it said.
The cost of acquisition to book value ratio, although posting a slow rise, remains low and is marked by wide variations across ARCs and economic sectors.
The ARCs have predominantly resorted to rescheduling of payment obligations as a method of resolution.
There is considerable concentration of older SRs in the books of the ARCs, it added.
Going forward, a new ARC for addressing the NPAs of public sector banks may also shape the operations of the existing ones.
has formed a six-member panel headed by Sudarshan Sen, former executive director, to carry out a comprehensive review of the working of ARCs.
The panel will recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector.
It will submit its report within three months from the date of its first meeting.
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