Revised RBI norms to improve governance, bolster ARCs structurally: Crisil

More stringent NOF guidelines could edge out smaller players, lead to consolidation

The Reserve Bank of India's revised guidelines for asset reconstruction companies (ARCs) would structurally fortify the sector through improved governance norms, better disclosures, and lower funding requirement for asset acquisition, according to Crisil.

However, the guidelines also require ARCs to increase their net owned funds to Rs 300 crore from Rs 100 crore in a phased manner by March 2026 end, which could be challenging for some of the smaller ones.

The business profiles of ARCs will benefit from two crucial changes: first, lower funding requirement for acquisitions, and the second, an option to participate as a resolution applicant under the Insolvency