Asset Reconstruction Companies have been set up in various countries internationally as an answer to the global problem of bad loans (NPAs or non performing assets). An approach to manage such bad loans on a concerted, central level, through a centralised agency or agencies is called centralised approach. ARCs arise out of this approach - that is, a centralised agency for resolving bad loans.

What are the advantages of an ARC approach?

• Centralisation of bad loans in one or a few hands and therefore more effectiveness
• Banks are left with cleaner balance sheets and do not have to deal with problem clients
• Regular banking relations with the group are not affected. Because it deals with a larger portfolio, it can mix up good assets with bad ones and make a sale which is palatable to buyers

Securitisation means acquisition of financial assets by any securitisation company or reconstruction company from any originator, whether by raising of funds by such securitisation company or reconstruction company from qualified institutional buyers by issue of security receipts representing undivided interest in such financial assets or otherwise.

Securitisation helps banks/FIs/NBFCs to sell off their bad loans (NPAs or non performing assets) to asset reconstruction companies (ARCs). ARCs act as debt aggregators and are engaged in acquiring bad loans from the banks/FIs/NBFCs thereby helping banks/FIs/NBFCs to focus on core activities.

We buy the NPA and securitise it by way of Merger or Asset Stripping.

Re-engineering is the fundamental re-thinking and radical re-design of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.

Companies that have been badly impacted and whose survival is endangered can be revived by bringing in radical changes in the way they do business.

We as an ARC also focus on the process of Business Reengineering for running businesses turned NPA in the books of Banks & Financial Institutions.