The proposed asset reconstruction company (ARC) may be positioned as a buyer of last resort with the banks and the government leaving the operations to a professional management.
While the blueprint for the ARC is being prepared by a committee headed by Punjab National Bank chairman Sunil Mehta, sources said the idea is to put in place a large ARC, which will step in to offer a better value to lenders, who are caught with an asset where it is tough to realise value and using the Insolvency and Bankruptcy Code (IBC) may not be the best option.
“It is not as if all the assets will go to the ARC. It will step in if it’s a viable option and banks realise better value. At the same time, it will ensure that there is value left in the asset to nurse it back to health or sell it and make money,” a source told TOI.
Source: Times of India, June 26, 2018