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Thursday, December 26, 2024 | 01:38 AM ISTEN Hindi

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Interpretation of ARC maladies

Regulatory oversight and supervision of ARCs need a revamp and, like other regulated entities, rogue ARCs should be punished

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Tamal Bandyopadhyay
A December 14 late evening release by the income tax department has confirmed the worst fears of many in the Indian financial system on how some asset reconstruction companies (ARCs) function. Search and seizure operations at 60 premises of four ARCs have exposed the “unholy nexus” between the borrowers and the ARCs.

The four are accused of “unfair and fraudulent trade practices in acquiring” the stressed loans. The bad loans acquired by them were “far less” than the real value of the securities covering such loans. What’s more, the minimum cash the ARCs paid to the lenders for such loans —
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