Asset Reconstruction Company India Limited (ARCIL):
The genesis of asset reconstruction business in India owes its origin to enactment of the Securitisation Act, 2002. Prior to promulgation of the Securitisation Act,2002 banks and financial institutions had no option but to enforce their security interests through the court process, which was extremely time consuming.
There was also no provision in any other law in respect of enforcement of hypothecation, though hypothecation was one of the major security interest taken by the banks and financial Institutions in India.
It was in this backdrop that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was passed on June 21, 2002 which was enacted by the parliament in December 2002 and became the Securitisation Act, 2002.
The Securitisation Act principally provides for the following:
Enforcement of Security Interests by secured creditors
Transfer of NPLs to asset reconstruction companies (ARCs), which can then take measures for recovery as prescribed under the Securitisation Act, 2002.
A legal framework for securitization of assets.
This empowerment encouraged the three major players in Indian banking system, namely, State Bank of India (SBI), ICICI Bank Limited (ICICI) and IDBI Bank Limited (IDBI) to come together to set-up the first ARC. Punjab National Bank (PNB) became Sponsor in October 2004 by virtue of its shareholding of10%. Other shareholders predominantly comprise private sector banks.
ARCIL was incorporated as a public limited company on February 11, 2002 and obtained its certificate of commencement of business on May 7, 2003.
In pursuance of Section 3 of the Securitisation Act 2002, it holds a certificate of registration dated August 29, 2003, issued by the Reserve Bank of India (RBI) and operates under powers conferred under the Securitisation Act, 2002.
ARCIL is also a "financial institution" within the meaning of Section 2 (h) (ia) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (the "DRT Act").
ARCIL is the first ARC in the country to commence business of resolution of NPLs upon acquisition from Indian banks and financial institutions. As the first ARC, ARCIL has played a pioneering role in setting standards for the industry in India.
The genesis of asset reconstruction business in India owes its origin to enactment of the Securitisation Act, 2002. Prior to promulgation of the Securitisation Act,2002 banks and financial institutions had no option but to enforce their security interests through the court process, which was extremely time consuming.
There was also no provision in any other law in respect of enforcement of hypothecation, though hypothecation was one of the major security interest taken by the banks and financial Institutions in India.
It was in this backdrop that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was passed on June 21, 2002 which was enacted by the parliament in December 2002 and became the Securitisation Act, 2002.
The Securitisation Act principally provides for the following:
Enforcement of Security Interests by secured creditors
Transfer of NPLs to asset reconstruction companies (ARCs), which can then take measures for recovery as prescribed under the Securitisation Act, 2002.
A legal framework for securitization of assets.
This empowerment encouraged the three major players in Indian banking system, namely, State Bank of India (SBI), ICICI Bank Limited (ICICI) and IDBI Bank Limited (IDBI) to come together to set-up the first ARC. Punjab National Bank (PNB) became Sponsor in October 2004 by virtue of its shareholding of10%. Other shareholders predominantly comprise private sector banks.
ARCIL was incorporated as a public limited company on February 11, 2002 and obtained its certificate of commencement of business on May 7, 2003.
In pursuance of Section 3 of the Securitisation Act 2002, it holds a certificate of registration dated August 29, 2003, issued by the Reserve Bank of India (RBI) and operates under powers conferred under the Securitisation Act, 2002.
ARCIL is also a "financial institution" within the meaning of Section 2 (h) (ia) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (the "DRT Act").
ARCIL is the first ARC in the country to commence business of resolution of NPLs upon acquisition from Indian banks and financial institutions. As the first ARC, ARCIL has played a pioneering role in setting standards for the industry in India.
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