To deal with the issue of bad loans on a war footing manner, the Finance Ministry on Wednesday charted out action plans including strengthening of asset reconstruction companies (ARCs) to deal with rising NPAs.
“ARCs would play an important role in cleaning up NPA (non-performing assets) mess...ARCs need to be strengthened to deal with the rising NPA in the system,” Financial Services Secretary Hasmukh Adhia said here.Various issues were discussed in the meeting, which was also attended by a senior RBI official, where actionable plans were charted out for strengthening of ARCs.
The immediate actionable points include, deciding uniform procedure for reserve price calculation method, he said, adding different banks calculate this in different manner which may be not be fair at times.Besides, these companies also requested that if an asset turns bad in case of consortium lending then the assets should be sold in consolidated manner instead of individual basis for better valuation and recovery from stressed assets.
This can also be looked at, he said, adding other concerns were allowing trading of security receipts issued by ARCs and capital adequacy issues.There has been demand of raising of investment cap of single promoter beyond 49 per cent, he said. At present, a single promoter can hold 49 per cent in an ARCs.