ARC
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
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Free sample — 8 of 66 rapid-fire Q&A cards.
What does ARC stand for in the context of Indian banking laws?
ARC stands for Asset Reconstruction Company, which is an entity established under the SARFAESI Act, 2002 to acquire Non-Performing Assets (NPAs) from banks and financial institutions and reconstruct or recover them.
Which year was the SARFAESI Act enacted that provides the legal framework for ARCs?
The SARFAESI Act was enacted in 2002.
Under which Act are Asset Reconstruction Companies (ARCs) regulated in India?
ARCs are regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, and are registered with and supervised by the Reserve Bank of India.
What is the full form of SARFAESI as it pertains to ARC regulation?
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest.
Which authority grants a Certificate of Registration (CoR) to an ARC?
The Reserve Bank of India (RBI) grants the Certificate of Registration to an ARC, and no entity can carry on the business of asset reconstruction or securitisation without such registration.
What is the minimum percentage of Security Receipts an ARC must retain in each scheme it floats?
An ARC must retain minimum 15% of Security Receipts in each scheme.
What is the minimum Net Owned Fund (NOF) required for an ARC to obtain RBI registration?
As per RBI guidelines, an ARC must have a minimum Net Owned Fund (NOF) of Rs. 100 crore to be eligible for registration and to commence business operations.
Who can an ARC appoint to manage the affairs of a defaulting borrower company?
An ARC can appoint a manager or administrator to manage borrower affairs.
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