Proposals embrace wider asset sourcing, broader SR investor base, and new capital-raising norms for ARCs.
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ArLawKa AungTun
The Reserve Financial institution of India is contemplating a serious overhaul within the rules of asset reconstruction firms (ARCs) in present fiscal, which embrace buying belongings from extra establishments, increasing the set of consumers who can put money into safety receipts (SRs) and capital elevating by ARCs, sources mentioned.
With corporates veering in direction of non-bank sources of funding resembling different funding funds and mutual funds, asset reconstruction firms (ARCs) need the scope of their actions expanded to incorporate acquisition of harassed monetary belongings from these monetary intermediaries.
Presently, ARCs can purchase fund and non-fund based mostly monetary belongings solely from banks and monetary establishments.
“The character of debt is altering. Corporations are more and more elevating funds from non-bank avenues. Mutual funds, particularly, are gaining wider adoption. On this view, the RBI is prone to permit ARCs to accumulate harassed monetary belongings from all regulated entities, together with AIFs, FPIs, AMCs making funding on behalf of MFs and from retail buyers in FY26,” a supply mentioned.
The RBI didn’t reply to businessline queries until press time.
RBI Governor Sanjay Malhotra, in his August bi-monthly financial coverage assertion, mentioned whereas the movement of non-food financial institution credit score throughout FY25 lowered by about ₹3.4 lakh crore to virtually ₹18 lakh crore, the movement from non-bank sources greater than made up for this lower. The overall movement of sources from non-banks (together with home and overseas sources) elevated by ₹4.3 lakh crore to ₹16.8 lakh crore in FY25.
“Banks are focusing extra on retail lending. Useful resource elevating by company is steadily shifting to varied AIFs and mutual funds. The entire personal credit score panorama is evolving quick. Loads of useful resource mobilisation is occurring by way of the bond market, the place the buyers are largely mutual funds, insurance coverage firms. For the reason that credit score panorama is altering, from ARC’s perspective, the stress asset panorama will even change,” mentioned the chief of an ARC.
Certified consumers
The listing of eligible certified consumers who can make investments and commerce in SRs issued by ARCs is prone to be expanded to incorporate excessive web price people (HNIs) with minimal funding of ₹1 crore, corporates with over ₹10 crore web price, trusts, household workplaces, pension funds and distressed asset funds.
That is topic to defaulting promoters not having access to secured belongings by way of SRs, and corporates being disallowed from investing in SRs issued by ARCs which might be associated events. This transfer is aimed toward enhancing the liquidity of SR market by means of itemizing and buying and selling of SRs.
Recent capital
To assist ARCs increase recent capital, the RBI may permit buyers to choose as much as 20 per cent stake in an ARC with out prior regulatory approval, from 10 per cent at the moment, as urged by the RBI appointed Sudarshan Sen committee in 2021.
Dues acquired by ARCs rose by 17 per cent year-on-year (y-o-y) to ₹1.71 lakh crore in FY25, excluding one-time SASF dues acquisition of ₹4.22 lakh crore. ARCs issued SRs amounting to ₹37,511 crore in FY25, 13 per cent increased than FY24. SR redemptions rose by 30 per cent to ₹43,256 crore in FY25, whereas web SR excellent fell 4 per cent on-year to ₹5,745 crore in FY25.
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Revealed on September 21, 2025