Policymakers have taken several steps to address the stressed assets problem. These include the setting up of the National Asset Reconstruction Company (NARCL) and the framing of new guidelines for sale of loan assets in the secondary market.
The Reserve Bank of India’s (RBI’s) expert committee on reforms in the working of asset reconstruction companies (ARCs) has also recommended solutions in the legal and regulatory framework that governs ARCs. One of the crucial being, “there should be fair competition between NARCL and private ARCs to promote the objectives of true true price discovery through the market mechanism”.
This article was originally published in Business Standard on 13 February 2022 Co-written by: Veena Sivaramakrishnan, Partner; Sumant Prashant, Principal Associate; Varun Marwah, Senior Associate. Click here for original article
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