How can ARCs help solve the banking crisis?

For an ARC to make sense, it must be a simple private equity fund

There is much interest in the role of asset reconstruction companies (ARCs) in solving India's banking crisis. In order to do this, we need to remedy the basic mistakes that have been made in the regulation of ARCs to date. We must ask: Why will an ARC fare better than a bank in dealing with an NPA? Why will a bank accept the bad news by selling assets to an ARC?

Banks in India fare poorly in giving loans and in dealing with an NPA. Why do we believe that an ARC will work better? Both groups of firms will hire