Q. “Asset Reconstruction Companies (ARCs)” is introduced by which of the following act?

[A] Reserve Bank of India Act, 1934

[B] The Banking Regulation Act, 1949

[C] Recovery of Debts Due to Banks and Financial Institutions Act, 1993

[D] Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

Answer: D
Notes:

ARCs were introduced to India under the SARFAESI Act (2002), as specialists to resolve the burden of NPAs.  

  • But the ARCs (most are privately-owned) finding it difficult to resolve the NPAs they purchased, are today only willing to purchase such loans at low prices.  
  • As a result, banks have been unwilling to sell them loans on a large scale. 

Source: TMH Ramesh Singh 

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