Letters: Functioning of ARCs

More than regulation, it is essential that an ecosystem is developed

With reference to “How can ARCs help solve the banking crisis?” (April 17), the articulation of Ajay Shah on the functioning of asset reconstruction companies (ARCs) is ideal tough to make it practical. Banks will be too happy to receive cash in lieu of security receipts (SRs), rightly referred to by the author as pieces of paper, as they are hardly redeemed for cash. Banks will prefer cash even if it is lower in value. ARCs are commercial entities. Ultimately, they will have to realise the value from the tainted asset greater than the price it paid to remain in