The Reserve Bank of India (“RBI”) had earlier barred the Asset Reconstruction Companies (“ARC”) from acquiring any non-performing financial assets only from their sponsor banks on a bilateral basis, whatever may be the consideration. Vide its notification dated December 06, 2019, RBI has extended the ambit of such prohibition to include the following categories:
However, the ARCs may participate in auctions of the financial assets provided such auctions are conducted in a transparent manner, on arm’s length basis and the prices are determined by the market forces.
This update has been contributed by Arka Majumdar (Partner) and Debanik Bid (Associate).
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