The Reserve Bank of India (RBI) has barred independent directors from becoming board members of an asset reconstruction company (ARC) and its promoter entity simultaneously.
In other words, the ARCs and its promoters cannot have common independent directors.
According to banking sources, this clause on the appointment of independent directors is the main reason for the delay in clearing the licence of ARC of India Ltd (Arcil), the first asset reconstruction company in the country.
Three independent directors of Arcil are also on the boards of promoting entities
