{"id":4275,"date":"2022-06-16T13:37:58","date_gmt":"2022-06-16T13:37:58","guid":{"rendered":"https:\/\/rakshithpai.com\/?p=4275"},"modified":"2023-12-22T14:26:27","modified_gmt":"2023-12-22T14:26:27","slug":"asset-reconstruction-companies-arcs","status":"publish","type":"post","link":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/","title":{"rendered":"What is an ARC? How does ARC improvise the current Banking System?"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d799872605\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\" style='display:none' id=\"ez-toc-cssicon-toggle-item-662d799872605\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Introduction\" title=\"Introduction:\">Introduction:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#What_is_an_Asset_Reconstruction\" title=\"What is an Asset Reconstruction?\">What is an Asset Reconstruction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#What_is_an_Asset_Reconstruction_Company\" title=\"What is an Asset Reconstruction Company?\">What is an Asset Reconstruction Company?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Bad_Loans_NPAs\" title=\"Bad Loans &amp; NPAs:\">Bad Loans &amp; NPAs:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Banks_Classify_NPAbad_loans_into_four_categories\" title=\"Banks Classify NPA\/bad loans into four categories.\">Banks Classify NPA\/bad loans into four categories.<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#What_is_Debt_Securitization\" title=\"What is Debt Securitization?\">What is Debt Securitization?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Why_do_ARCs_acquire_bad_loans\" title=\"Why do ARCs acquire bad loans?\">Why do ARCs acquire bad loans?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Such_a_move_will_call_for_a_2-factor_result\" title=\"Such a move will call for a 2-factor result.\">Such a move will call for a 2-factor result.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#How_does_ARC_acquire_such_bad_loans\" title=\"How does ARC acquire such bad loans?\">How does ARC acquire such bad loans?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Fund_Raising\" title=\"Fund Raising\">Fund Raising<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Partnership_Model\" title=\"Partnership Model\">Partnership Model<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#FAQs\" title=\"FAQs:\">FAQs:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#For_More_Information_Watch_YouTube_Video\" title=\"For More Information, Watch YouTube Video:\">For More Information, Watch YouTube Video:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#Also_read\" title=\"Also read: \">Also read: <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span><strong>Introduction:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A bank is a type of financial institution that is permitted to accept deposits and provide loans. Banks may offer financial services such as capital management, currency exchange, cash deposit, etc.&nbsp;<\/p>\n\n\n\n<p>Retail banks, commercial or corporate banks, and investment banks are among the several types of banks. Banks are governed by the central government or the central bank in most nations.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>In India, we have the Reserve Bank of India to govern Indian banking and financial services.<\/strong><\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-1 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/upstox.com\/open-account\/?f=FN1853\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Upstox Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<p>Banks are financial institutions primarily involved in the business of lending and borrowing money. There are a lot of people who do business with banks, and lending money comes with a lot of risks.<\/p>\n\n\n\n<p>While the bank always has the option of pursuing legal action against defaulting borrowers, doing so is not always financially practical. <strong>The bank may choose to simply reduce its losses, clean up its balance sheet, and keep the business moving in the right direction. An Asset Reconstruction Company (ABC) can help with this.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_an_Asset_Reconstruction\"><\/span><strong>What is an Asset Reconstruction?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Asset Reconstruction is the purchase of any bank or financial institution&#8217;s right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term &#8220;financial assistance&#8221; includes loans, advances, bonds, guarantees, and other credit facilities.<\/strong><\/p>\n\n\n\n<p>Asset reconstruction is the term used in India to describe the process of removing debt from balance sheets. In other nations, however, it is known as securitization. Both of these words essentially mean the same thing.&nbsp;<\/p>\n\n\n\n<p>Asset reconstruction is, however, performed by professional companies in India. The sale of debt is less restricted in industrialized countries such as the United States. As a result, debt can be sold to a variety of corporate entities as well as individuals.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_an_Asset_Reconstruction_Company\"><\/span><strong>What is an Asset Reconstruction Company?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Asset Reconstruction Company also called ARC, is a unique form of financial entity that purchases the bank&#8217;s loan books at a mutually agreed upon price and seeks to collect the debts or underlying securities on its own.<\/strong><\/p>\n\n\n\n<p>An asset reconstruction business is a sort of financial institution that buys a bank&#8217;s debtors at a mutually agreed-upon price and tries to collect the debts or linked securities on its own.<\/p>\n\n\n\n<p><strong>The <a href=\"https:\/\/rakshithpai.com\/rbi-functions\/\">RBI<\/a> registers asset reconstruction firms or ARCs, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002) regulates them.<\/strong><\/p>\n\n\n\n<p>The ARCs take over a portion of the bank&#8217;s debts that meet the criteria for being classified as non-performing assets. As a result, ARCs are involved in asset reconstruction, securitization, or both.<\/p>\n\n\n\n<p>All of the lender&#8217;s (bank&#8217;s) rights to the debt would be transferred to the ARC. Qualified buyers can provide the necessary funds to purchase such debts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bad_Loans_NPAs\"><\/span><strong>Bad Loans &amp; NPAs:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Suppose Bank has Non-Performing Asset (NPA) or bad loans worth 100 crores. These bad loans are weighing in on the bank&#8217;s books.&nbsp;<\/p>\n\n\n\n<p><strong>In order to shift the bad loans off the books and also, not to lose out on the recovery of the said bad loans, Banks hand over the loan book to a company that specializes in recovering the bad loans. Such companies are called ARCs.<\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Banks_Classify_NPAbad_loans_into_four_categories\"><\/span><strong>Banks Classify NPA\/bad loans into four categories.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ol>\n<li>Standard debt<\/li>\n\n\n\n<li>Sub Standard Debt<\/li>\n\n\n\n<li>Doubtful debt<\/li>\n\n\n\n<li>Loss<\/li>\n<\/ol>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"680\" src=\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c-1024x680.jpg\" alt=\"bad loan, NPA \" class=\"wp-image-4278\" style=\"width:1182px;height:785px\" srcset=\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c-1024x680.jpg 1024w, https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c-300x199.jpg 300w, https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c-768x510.jpg 768w, https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c-1536x1020.jpg 1536w, https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/uuyktnqkn9c.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>In the case of Standard debt or debt secured by an asset, there isn\u2019t much to worry about.<\/p>\n\n\n\n<p>But in the case of a sub-standard debt, a doubtful debt, and lost debt, the chance of recovering gets slimmer and thus requires the assistance of an ARC.<\/p>\n\n\n\n<p><strong>ARCs acquire from banks &amp; Financial institutions loan books that are secured by some assets such as shares, bonds, property, etc.&nbsp;<\/strong><\/p>\n\n\n\n<p>Debts that are considered to be a loss with no chance of recovery and with no asset backing are written off from the books. Or we may get to see the debt securitization.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-2 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/upstox.com\/open-account\/?f=FN1853\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Upstox Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Debt_Securitization\"><\/span><strong>What is Debt Securitization?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The act of transforming a group of debts into marketable security that is guaranteed, or securitized, by the underlying debts is known as securitization.<\/strong><\/p>\n\n\n\n<p>The majority of debt instruments are made up of bank loans to their customers, such as mortgages. Any receivables-based financial asset, on the other hand, can serve as debt security. Underlying assets include trade receivables, credit card debt, and leases.<\/p>\n\n\n\n<p>When an investor buys stock in a firm, he or she acquires a claim on the property and cash flows. In the same way, an investor who buys a collateralized debt product has a right to the payments that will be made on the underlying debt instruments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_do_ARCs_acquire_bad_loans\"><\/span><strong>Why do ARCs acquire bad loans?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Asset reconstruction companies purchase defaulted debts from banks. For instance, if a bank lends money to a person or business, the bank anticipates receiving periodic principal and interest payments.&nbsp;<\/strong><\/p>\n\n\n\n<p>However, when these monthly payments are not received for a lengthy period of time (let\u2019s say 90 days), these loans are classed as nonperforming assets. Allowing these non-performing assets to remain on the bank&#8217;s balance sheet erodes investor trust in the bank.<\/p>\n\n\n\n<p>As a result, banks sell these subprime loans to asset reconstruction companies. These organizations make their money by purchasing subprime loans from banks at a substantial discount.&nbsp;<\/p>\n\n\n\n<p><strong>These businesses then take additional steps to recoup the debt. If they are successful in recovering the money, they benefit; if not, they lose it.<\/strong><\/p>\n\n\n\n<p><strong>For example<\/strong>, Yes Bank Limited is filled with mismanaged loan books. These loans may never be received if left in the bank&#8217;s books. Hence, Yes Bank management intends to transfer about Rs.50,000 crores of its bad debts including those written off loans from its balance sheet.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Such_a_move_will_call_for_a_2-factor_result\"><\/span><strong>Such a move will call for a 2-factor result.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol>\n<li>Yes bank books will seem to be healthy hereon with reduced bad loans.<\/li>\n\n\n\n<li>An efficient ARC can reduce loan slippages and recover bad loans much more efficiently than banks could ever do.<\/li>\n<\/ol>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-wp-embed is-provider-embed wp-block-embed-embed\"><blockquote class=\"wp-embedded-content\" data-secret=\"DQ02kb7TK5\"><a href=\"https:\/\/rakshithpai.com\/best-banking-stocks-to-buy\/\">Top 10 Banking Stocks to Buy in India &#8211; 2022<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Top 10 Banking Stocks to Buy in India &#8211; 2022&#8221; &#8212; \" src=\"https:\/\/rakshithpai.com\/best-banking-stocks-to-buy\/embed\/#?secret=r2zEJTVUIt#?secret=DQ02kb7TK5\" data-secret=\"DQ02kb7TK5\" width=\"200\" height=\"200\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_ARC_acquire_such_bad_loans\"><\/span><strong>How does ARC acquire such bad loans?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In terms of financing, an ARC can issue bonds and debentures to suit its needs. The issue of security receipts, however, is the primary and possibly unique source of funds for the ARCs.&nbsp;<\/p>\n\n\n\n<p><strong>Security Receipts are receipts or other securities issued by a reconstruction business (or a securitization company in that case) to any qualified institutional buyers (QIBs) for a certain scheme, as defined by the SARFAESI Act.&nbsp;<\/strong><\/p>\n\n\n\n<p>The holder (QIB) of a Security Receipt has a right, title, or interest in the financial asset purchased by the ARC. These ARC-issued SRs are secured by non-performing assets.<\/p>\n\n\n\n<p><strong>Basically, an ARC can acquire such loan books in 2 manners:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fund_Raising\"><\/span><strong>Fund Raising<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>ARCs are permitted to fundraise from qualified institutional buyers (QIB) in order to fund an upfront payment required to purchase reduced debts. To raise the funds, ARCs could issue financial instruments or perhaps sell shares.&nbsp;<\/strong><\/p>\n\n\n\n<p>The ARC, on the other hand, is responsible for ensuring that individual investors do not invest their money in these instruments. Because ARCs are a high-risk business, they are only available to QIBs with the financial resources to absorb such a loss.<\/p>\n\n\n\n<p>By raising funds from the \u201cQualified Institutional Buyer\u201d QIBs. ARC is a high-risk venture, and only non-retail participants are allowed to invest in the business. From the amount raised, ARC will buy loan books at discounted<strong> <\/strong>prices and if they could recover the said bad loans, they make a profit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Partnership_Model\"><\/span><strong>Partnership Model<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Many times, ARCs do not buy debt directly from banks. In these circumstances, the debt is still recorded on the bank&#8217;s books. The bank, on the other hand, contracts the ARC to handle debt collection. The bank and the ARC split the money made this way at a rate that had already been decided.<\/strong><\/p>\n\n\n\n<p>In this case, ARCs will partner with the bank and financial institutions holding the bad loans. ARC will assist the institution in realizing their bad loans and in return get their share in profit.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-3 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/upstox.com\/open-account\/?f=FN1853\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Upstox Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The country&#8217;s most pressing issue right now is the alarming amount of non-performing assets in the banking system. NPAs have been the subject of several attempts.&nbsp;<\/strong><\/p>\n\n\n\n<p>The introduction of dedicated organizations known as Asset Reconstruction Companies or ARCs, which purchase poor assets or nonperforming assets (NPAs) from banks at a negotiated price and assist banks in cleaning up their balance books, was one such serious step (by removing the NPAs).&nbsp;<\/p>\n\n\n\n<p>The ARCs&#8217; performance is being assessed in light of the growing number of NPAs. Simultaneously, the new Insolvency and Bankruptcy Act will give ARCs a crucial role in resolving problematic assets through the insolvency process.<\/p>\n\n\n\n<p><strong>Companies that buy poor loans from banks are known as asset reconstruction companies. If a bank lends money to a person or a firm, for example, the bank expects to be paid principal and interest on a regular basis. <\/strong><\/p>\n\n\n\n<p>These loans are categorized as nonperforming assets when they do not get periodic payments over an extended period of time (let&#8217;s say 90 days). If these nonperforming assets (NPAs) were allowed to remain on the bank&#8217;s balance sheet, they would destroy investor confidence.<\/p>\n\n\n\n<p>As a result, banks sell these problematic loans to asset reconstruction companies. These businesses specialize in purchasing poor loans from banks at a substantial discount. These businesses then take extra steps to retrieve the money owing to them. They make a profit if they can retrieve the money; otherwise, they lose it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-9be432c2 uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-false uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-deb9acd9\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is Asset Reconstruction under Sarfaesi Act?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">The RBI registers asset reconstruction firms or ARCs, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 regulates them (SARFAESI Act, 2002).<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-35d037ad\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Is an Asset Reconstruction company an NBFC?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">The ARC must be registered as a non-banking financial institution (NBFC). Individuals, companies, corporations, and public sector undertakings, both Indian and foreign, can establish them.<\/p><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-2044072d uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-false uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-5b4fdee0\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>How many Asset Reconstruction companies are there in India?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">The Association of Asset Reconstruction Companies in India (Association of ARCs in India) is a representative body of 28 asset reconstruction companies registered with the Reserve Bank of India.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-0ce96dbe\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Is an Asset Reconstruction company and a Bad Bank the same?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Yes, In the Budget 2021 speech on February 1st, Union Finance Minister Nirmala Sitharaman declared an asset reconstruction business\/asset management firm, or more simply known as a &#8220;Bad Bank,&#8221; to aid the banking system in getting rid of the existing stock of problematic loans.<\/p><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"For_More_Information_Watch_YouTube_Video\"><\/span><strong>For More Information, Watch YouTube Video:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"ast-oembed-container \" style=\"height: 100%;\"><iframe loading=\"lazy\" title=\"Asset Reconstruction Company? Its Benefits, Features &amp; Importance in Banking System. #ARC\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/DvgwP5HPMb8?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-4 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link has-text-color has-background wp-element-button\" href=\"https:\/\/upstox.com\/open-account\/?f=FN1853\" style=\"border-radius:50px;color:#0f0027;background-color:#e4fa00\" rel=\"nofollow\"><strong>Open Upstox Account Now!<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<p><strong><strong>Disclaimer: <\/strong><\/strong>All the information on this website is published in good faith and for general information purposes only.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"also-read\"><span class=\"ez-toc-section\" id=\"Also_read\"><\/span><strong>Also read:<\/strong> <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><a href=\"https:\/\/rakshithpai.com\/find-and-invest-stocks-with-moat\/\" target=\"_blank\" rel=\"noreferrer noopener\">Find &amp; Invest in Companies With Strong MOAT:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/best-sectors-for-long-term-investing\/\" target=\"_blank\" rel=\"noreferrer noopener\">Top 3 Sectors For Long-Term Investing &#8211; 2022<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/easy-ways-to-save-income-tax\/\" target=\"_blank\" rel=\"noreferrer noopener\">15 Best Ways to Save Income Tax in India:<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/how-do-interest-rates-affect-the-stock-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">How Do Interest Rates Affect the Stock Market?<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/rakshithpai.com\/how-to-invest-in-unlisted-companies\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Invest in Unlisted Companies? Pros &amp; Cons of Owning Unlisted shares:<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: A bank is a type of financial institution that is permitted to accept deposits and provide loans. Banks may offer financial services such as capital management, currency exchange, cash deposit, etc.&nbsp; Retail banks, commercial or corporate banks, and investment banks are among the several types of banks. Banks are governed by the central government [&hellip;]<\/p>\n<div class='heateor_sss_sharing_container heateor_sss_vertical_sharing heateor_sss_bottom_sharing' style='width:44px;right: -10px;top: 100px;background-color: Dark Blue' data-heateor-sss-href='https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275'><div class=\"heateor_sss_sharing_ul\"><a aria-label=\"Facebook\" class=\"heateor_sss_facebook\" href=\"https:\/\/www.facebook.com\/sharer\/sharer.php?u=https%3A%2F%2Frakshithpai.com%2Fwp-json%2Fwp%2Fv2%2Fposts%2F4275\" title=\"Facebook\" rel=\"nofollow noopener\" target=\"_blank\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span class=\"heateor_sss_svg\" style=\"background-color:#0765FE;width:40px;height:40px;margin:0;display:inline-block;opacity:1;float:left;font-size:32px;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box\"><svg style=\"display:block;\" focusable=\"false\" aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"100%\" height=\"100%\" viewBox=\"0 0 32 32\"><path fill=\"#fff\" d=\"M28 16c0-6.627-5.373-12-12-12S4 9.373 4 16c0 5.628 3.875 10.35 9.101 11.647v-7.98h-2.474V16H13.1v-1.58c0-4.085 1.849-5.978 5.859-5.978.76 0 2.072.15 2.608.298v3.325c-.283-.03-.775-.045-1.386-.045-1.967 0-2.728.745-2.728 2.683V16h3.92l-.673 3.667h-3.247v8.245C23.395 27.195 28 22.135 28 16Z\"><\/path><\/svg><\/span><\/a><a aria-label=\"Twitter\" class=\"heateor_sss_button_twitter\" href=\"http:\/\/twitter.com\/intent\/tweet?text=%20-%20Save%20-%20Invest%20-%20Repeat&url=https%3A%2F%2Frakshithpai.com%2Fwp-json%2Fwp%2Fv2%2Fposts%2F4275\" title=\"Twitter\" rel=\"nofollow noopener\" target=\"_blank\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span class=\"heateor_sss_svg heateor_sss_s__default heateor_sss_s_twitter\" style=\"background-color:#55acee;width:40px;height:40px;margin:0;display:inline-block;opacity:1;float:left;font-size:32px;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box\"><svg style=\"display:block;\" focusable=\"false\" aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"100%\" height=\"100%\" viewBox=\"-4 -4 39 39\"><path d=\"M28 8.557a9.913 9.913 0 0 1-2.828.775 4.93 4.93 0 0 0 2.166-2.725 9.738 9.738 0 0 1-3.13 1.194 4.92 4.92 0 0 0-3.593-1.55 4.924 4.924 0 0 0-4.794 6.049c-4.09-.21-7.72-2.17-10.15-5.15a4.942 4.942 0 0 0-.665 2.477c0 1.71.87 3.214 2.19 4.1a4.968 4.968 0 0 1-2.23-.616v.06c0 2.39 1.7 4.38 3.952 4.83-.414.115-.85.174-1.297.174-.318 0-.626-.03-.928-.086a4.935 4.935 0 0 0 4.6 3.42 9.893 9.893 0 0 1-6.114 2.107c-.398 0-.79-.023-1.175-.068a13.953 13.953 0 0 0 7.55 2.213c9.056 0 14.01-7.507 14.01-14.013 0-.213-.005-.426-.015-.637.96-.695 1.795-1.56 2.455-2.55z\" fill=\"#fff\"><\/path><\/svg><\/span><\/a><a aria-label=\"Linkedin\" class=\"heateor_sss_button_linkedin\" href=\"https:\/\/www.linkedin.com\/sharing\/share-offsite\/?url=https%3A%2F%2Frakshithpai.com%2Fwp-json%2Fwp%2Fv2%2Fposts%2F4275\" title=\"Linkedin\" rel=\"nofollow noopener\" target=\"_blank\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span class=\"heateor_sss_svg heateor_sss_s__default heateor_sss_s_linkedin\" style=\"background-color:#0077b5;width:40px;height:40px;margin:0;display:inline-block;opacity:1;float:left;font-size:32px;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box\"><svg style=\"display:block;\" focusable=\"false\" aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"100%\" height=\"100%\" viewBox=\"0 0 32 32\"><path d=\"M6.227 12.61h4.19v13.48h-4.19V12.61zm2.095-6.7a2.43 2.43 0 0 1 0 4.86c-1.344 0-2.428-1.09-2.428-2.43s1.084-2.43 2.428-2.43m4.72 6.7h4.02v1.84h.058c.56-1.058 1.927-2.176 3.965-2.176 4.238 0 5.02 2.792 5.02 6.42v7.395h-4.183v-6.56c0-1.564-.03-3.574-2.178-3.574-2.18 0-2.514 1.7-2.514 3.46v6.668h-4.187V12.61z\" fill=\"#fff\"><\/path><\/svg><\/span><\/a><a aria-label=\"Whatsapp\" class=\"heateor_sss_whatsapp\" href=\"https:\/\/api.whatsapp.com\/send?text=%20-%20Save%20-%20Invest%20-%20Repeat https%3A%2F%2Frakshithpai.com%2Fwp-json%2Fwp%2Fv2%2Fposts%2F4275\" title=\"Whatsapp\" rel=\"nofollow noopener\" target=\"_blank\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span class=\"heateor_sss_svg\" style=\"background-color:#55eb4c;width:40px;height:40px;margin:0;display:inline-block;opacity:1;float:left;font-size:32px;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box\"><svg style=\"display:block;\" focusable=\"false\" aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"100%\" height=\"100%\" viewBox=\"-6 -5 40 40\"><path class=\"heateor_sss_svg_stroke heateor_sss_no_fill\" stroke=\"#fff\" stroke-width=\"2\" fill=\"none\" d=\"M 11.579798566743314 24.396926207859085 A 10 10 0 1 0 6.808479557110079 20.73576436351046\"><\/path><path d=\"M 7 19 l -1 6 l 6 -1\" class=\"heateor_sss_no_fill heateor_sss_svg_stroke\" stroke=\"#fff\" stroke-width=\"2\" fill=\"none\"><\/path><path d=\"M 10 10 q -1 8 8 11 c 5 -1 0 -6 -1 -3 q -4 -3 -5 -5 c 4 -2 -1 -5 -1 -4\" fill=\"#fff\"><\/path><\/svg><\/span><\/a><a aria-label=\"Copy Link\" class=\"heateor_sss_button_copy_link\" title=\"Copy Link\" rel=\"nofollow noopener\" href=\"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275\" onclick=\"event.preventDefault()\" style=\"font-size:32px!important;box-shadow:none;display:inline-block;vertical-align:middle\"><span class=\"heateor_sss_svg heateor_sss_s__default heateor_sss_s_copy_link\" style=\"background-color:#ffc112;width:40px;height:40px;margin:0;display:inline-block;opacity:1;float:left;font-size:32px;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box\"><svg style=\"display:block;\" focusable=\"false\" aria-hidden=\"true\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"100%\" height=\"100%\" viewBox=\"-4 -4 40 40\"><path fill=\"#fff\" d=\"M24.412 21.177c0-.36-.126-.665-.377-.917l-2.804-2.804a1.235 1.235 0 0 0-.913-.378c-.377 0-.7.144-.97.43.026.028.11.11.255.25.144.14.24.236.29.29s.117.14.2.256c.087.117.146.232.177.344.03.112.046.236.046.37 0 .36-.126.666-.377.918a1.25 1.25 0 0 1-.918.377 1.4 1.4 0 0 1-.373-.047 1.062 1.062 0 0 1-.345-.175 2.268 2.268 0 0 1-.256-.2 6.815 6.815 0 0 1-.29-.29c-.14-.142-.223-.23-.25-.254-.297.28-.445.607-.445.984 0 .36.126.664.377.916l2.778 2.79c.243.243.548.364.917.364.36 0 .665-.118.917-.35l1.982-1.97c.252-.25.378-.55.378-.9zm-9.477-9.504c0-.36-.126-.665-.377-.917l-2.777-2.79a1.235 1.235 0 0 0-.913-.378c-.35 0-.656.12-.917.364L7.967 9.92c-.254.252-.38.553-.38.903 0 .36.126.665.38.917l2.802 2.804c.242.243.547.364.916.364.377 0 .7-.14.97-.418-.026-.027-.11-.11-.255-.25s-.24-.235-.29-.29a2.675 2.675 0 0 1-.2-.255 1.052 1.052 0 0 1-.176-.344 1.396 1.396 0 0 1-.047-.37c0-.36.126-.662.377-.914.252-.252.557-.377.917-.377.136 0 .26.015.37.046.114.03.23.09.346.175.117.085.202.153.256.2.054.05.15.148.29.29.14.146.222.23.25.258.294-.278.442-.606.442-.983zM27 21.177c0 1.078-.382 1.99-1.146 2.736l-1.982 1.968c-.745.75-1.658 1.12-2.736 1.12-1.087 0-2.004-.38-2.75-1.143l-2.777-2.79c-.75-.747-1.12-1.66-1.12-2.737 0-1.106.392-2.046 1.183-2.818l-1.186-1.185c-.774.79-1.708 1.186-2.805 1.186-1.078 0-1.995-.376-2.75-1.13l-2.803-2.81C5.377 12.82 5 11.903 5 10.826c0-1.08.382-1.993 1.146-2.738L8.128 6.12C8.873 5.372 9.785 5 10.864 5c1.087 0 2.004.382 2.75 1.146l2.777 2.79c.75.747 1.12 1.66 1.12 2.737 0 1.105-.392 2.045-1.183 2.817l1.186 1.186c.774-.79 1.708-1.186 2.805-1.186 1.078 0 1.995.377 2.75 1.132l2.804 2.804c.754.755 1.13 1.672 1.13 2.75z\"\/><\/svg><\/span><\/a><a class=\"heateor_sss_more\" title=\"More\" rel=\"nofollow noopener\" style=\"font-size: 32px!important;border:0;box-shadow:none;display:inline-block!important;font-size:16px;padding:0 4px;vertical-align: middle;display:inline;\" href=\"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275\" onclick=\"event.preventDefault()\"><span class=\"heateor_sss_svg\" style=\"background-color:#ee8e2d;width:40px;height:40px;margin:0;display:inline-block!important;opacity:1;float:left;font-size:32px!important;box-shadow:none;display:inline-block;font-size:16px;padding:0 4px;vertical-align:middle;display:inline;background-repeat:repeat;overflow:hidden;padding:0;cursor:pointer;box-sizing:content-box;\" onclick=\"heateorSssMoreSharingPopup(this, 'https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275', '%20-%20Save%20-%20Invest%20-%20Repeat', '' )\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" viewBox=\"-.3 0 32 32\" version=\"1.1\" width=\"100%\" height=\"100%\" style=\"display:block;\" xml:space=\"preserve\"><g><path fill=\"#fff\" d=\"M18 14V8h-4v6H8v4h6v6h4v-6h6v-4h-6z\" fill-rule=\"evenodd\"><\/path><\/g><\/svg><\/span><\/a><\/div><div class=\"heateorSssClear\"><\/div><\/div>","protected":false},"author":1,"featured_media":4280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[1,10],"tags":[60,59,62,61],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is an ARC? How does ARC improvise the current Banking System? -<\/title>\n<meta name=\"description\" content=\"Asset Reconstruction is the purchase of any bank or financial institution&#039;s right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term &quot;financial assistance&quot; includes loans, advances, bonds, guarantees, and other credit facilities.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is an ARC? How does ARC improvise the current Banking System? -\" \/>\n<meta property=\"og:description\" content=\"Asset Reconstruction is the purchase of any bank or financial institution&#039;s right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term &quot;financial assistance&quot; includes loans, advances, bonds, guarantees, and other credit facilities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/Iam.Mrpai\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-16T13:37:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-22T14:26:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Rakshith Pai\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Iam_MrPai\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rakshith Pai\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/\",\"url\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/\",\"name\":\"What is an ARC? How does ARC improvise the current Banking System? -\",\"isPartOf\":{\"@id\":\"https:\/\/rakshithpai.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg\",\"datePublished\":\"2022-06-16T13:37:58+00:00\",\"dateModified\":\"2023-12-22T14:26:27+00:00\",\"author\":{\"@id\":\"https:\/\/rakshithpai.com\/#\/schema\/person\/5a10929466befdcdb3013e5341aeb693\"},\"description\":\"Asset Reconstruction is the purchase of any bank or financial institution's right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term \\\"financial assistance\\\" includes loans, advances, bonds, guarantees, and other credit facilities.\",\"breadcrumb\":{\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage\",\"url\":\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg\",\"contentUrl\":\"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Asset Reconstruction Company - How to Affect Indian Banking System?\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/rakshithpai.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What is an ARC? How does ARC improvise the current Banking System?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/rakshithpai.com\/#website\",\"url\":\"https:\/\/rakshithpai.com\/\",\"name\":\"\",\"description\":\"Save - Invest - Repeat\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/rakshithpai.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/rakshithpai.com\/#\/schema\/person\/5a10929466befdcdb3013e5341aeb693\",\"name\":\"Rakshith Pai\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/rakshithpai.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/34b7459182e8fb8b80ca20098eb1e8a9?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/34b7459182e8fb8b80ca20098eb1e8a9?s=96&d=mm&r=g\",\"caption\":\"Rakshith Pai\"},\"description\":\"An Investor, Entrepreneur by profession, and an Economist (Monetarist) by passion. Professional Investor in Equities and other assets. Here to spread the concept of \u201cSane Investing\u201d.\",\"sameAs\":[\"https:\/\/rakshithpai.com\",\"https:\/\/www.facebook.com\/Iam.Mrpai\",\"https:\/\/www.instagram.com\/iam_mrpai\",\"https:\/\/www.linkedin.com\/in\/iam-mrpai\",\"https:\/\/in.pinterest.com\/Iam_MrPai\",\"https:\/\/x.com\/Iam_MrPai\",\"https:\/\/www.youtube.com\/channel\/UC3vfc8G1sysZleCAKbytRFQ?view_as=subscriber\"],\"url\":\"https:\/\/rakshithpai.com\/author\/mrpai27\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is an ARC? How does ARC improvise the current Banking System? -","description":"Asset Reconstruction is the purchase of any bank or financial institution's right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term \"financial assistance\" includes loans, advances, bonds, guarantees, and other credit facilities.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/","og_locale":"en_US","og_type":"article","og_title":"What is an ARC? How does ARC improvise the current Banking System? -","og_description":"Asset Reconstruction is the purchase of any bank or financial institution's right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term \"financial assistance\" includes loans, advances, bonds, guarantees, and other credit facilities.","og_url":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/","article_author":"https:\/\/www.facebook.com\/Iam.Mrpai","article_published_time":"2022-06-16T13:37:58+00:00","article_modified_time":"2023-12-22T14:26:27+00:00","og_image":[{"width":1280,"height":720,"url":"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg","type":"image\/jpeg"}],"author":"Rakshith Pai","twitter_card":"summary_large_image","twitter_creator":"@Iam_MrPai","twitter_misc":{"Written by":"Rakshith Pai","Est. reading time":"9 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/","url":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/","name":"What is an ARC? How does ARC improvise the current Banking System? -","isPartOf":{"@id":"https:\/\/rakshithpai.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage"},"image":{"@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage"},"thumbnailUrl":"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg","datePublished":"2022-06-16T13:37:58+00:00","dateModified":"2023-12-22T14:26:27+00:00","author":{"@id":"https:\/\/rakshithpai.com\/#\/schema\/person\/5a10929466befdcdb3013e5341aeb693"},"description":"Asset Reconstruction is the purchase of any bank or financial institution's right or interest in loans, advances, debentures, bonds, guarantees, or any other credit facility issued by banks with the aim of realizing it. The term \"financial assistance\" includes loans, advances, bonds, guarantees, and other credit facilities.","breadcrumb":{"@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#primaryimage","url":"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg","contentUrl":"https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg","width":1280,"height":720,"caption":"Asset Reconstruction Company - How to Affect Indian Banking System?"},{"@type":"BreadcrumbList","@id":"https:\/\/rakshithpai.com\/asset-reconstruction-companies-arcs\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/rakshithpai.com\/"},{"@type":"ListItem","position":2,"name":"What is an ARC? How does ARC improvise the current Banking System?"}]},{"@type":"WebSite","@id":"https:\/\/rakshithpai.com\/#website","url":"https:\/\/rakshithpai.com\/","name":"","description":"Save - Invest - Repeat","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/rakshithpai.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/rakshithpai.com\/#\/schema\/person\/5a10929466befdcdb3013e5341aeb693","name":"Rakshith Pai","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/rakshithpai.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/34b7459182e8fb8b80ca20098eb1e8a9?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/34b7459182e8fb8b80ca20098eb1e8a9?s=96&d=mm&r=g","caption":"Rakshith Pai"},"description":"An Investor, Entrepreneur by profession, and an Economist (Monetarist) by passion. Professional Investor in Equities and other assets. Here to spread the concept of \u201cSane Investing\u201d.","sameAs":["https:\/\/rakshithpai.com","https:\/\/www.facebook.com\/Iam.Mrpai","https:\/\/www.instagram.com\/iam_mrpai","https:\/\/www.linkedin.com\/in\/iam-mrpai","https:\/\/in.pinterest.com\/Iam_MrPai","https:\/\/x.com\/Iam_MrPai","https:\/\/www.youtube.com\/channel\/UC3vfc8G1sysZleCAKbytRFQ?view_as=subscriber"],"url":"https:\/\/rakshithpai.com\/author\/mrpai27\/"}]}},"uagb_featured_image_src":{"full":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",1280,720,false],"thumbnail":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know-150x150.jpg",150,150,true],"medium":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know-300x169.jpg",300,169,true],"medium_large":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know-768x432.jpg",768,432,true],"large":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know-1024x576.jpg",1024,576,true],"1536x1536":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",1280,720,false],"2048x2048":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",1280,720,false],"web-stories-poster-portrait":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",640,360,false],"web-stories-publisher-logo":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",96,54,false],"web-stories-thumbnail":["https:\/\/rakshithpai.com\/wp-content\/uploads\/2022\/06\/ARC-Asset-Reconstruction-Company-Everything-you-need-to-know.jpg",150,84,false]},"uagb_author_info":{"display_name":"Rakshith Pai","author_link":"https:\/\/rakshithpai.com\/author\/mrpai27\/"},"uagb_comment_info":0,"uagb_excerpt":"Introduction: A bank is a type of financial institution that is permitted to accept deposits and provide loans. Banks may offer financial services such as capital management, currency exchange, cash deposit, etc.&nbsp; Retail banks, commercial or corporate banks, and investment banks are among the several types of banks. Banks are governed by the central government&hellip;","_links":{"self":[{"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275"}],"collection":[{"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/comments?post=4275"}],"version-history":[{"count":6,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275\/revisions"}],"predecessor-version":[{"id":8215,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/posts\/4275\/revisions\/8215"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/media\/4280"}],"wp:attachment":[{"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/media?parent=4275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/categories?post=4275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rakshithpai.com\/wp-json\/wp\/v2\/tags?post=4275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}