Identify various constraints, challenges and offer relevant suggestions to improve the performance of Asset Reconstruction Companies. (200 Words)
Refer - Indian Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· The newly-created National Asset Reconstruction Company (NARCL) in the public sector offers hopes for the faster clean up of lenders’ balance sheets.
· This would be the 30th Asset Reconstruction Company (ARC) in the business of resolving distressed assets, but the first in the public sector.
· The RBI has also launched a slew of measures during 2013-14 to resolve, reconstruct and restructure stressed assets. These too did not deliver and they were all abandoned subsequently.
· The top five ARCs account for over 70 per cent of the asset under management (AUM) and nearly 65 per cent of the capital.
· The IBC, introduced has succeeded in resolving a few large corporate borrowers with an average recovery of 45 per cent.
· But there is concern about the elevated haircuts — in some cases going up to 95 per cent.
· The NCLT (National Company Law Tribunal) proves to be the choke point. It is the backbone of the IBC, but lamentably is starved of infrastructure and over 50 per cent (34 out of 63) of NCLT benches were bereft of regular judges.
· The IBC has made considerable progress in bringing about behavioural change in errant and wilful defaulters by forbidding them to take back distressed assets.
K. V. A 2 years
Pls review
IAS Parliament 2 years
Good attemt. Keep Writing.
Sriram 2 years
Kindly review
IAS Parliament 2 years
Try to provide conclusion and breakdown the sub-headings. Keep Writing.
