What are the criteria for formation of ARCs?

ARCs criteria FORMATION
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What are the criteria for formation of ARCs?

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A. Every ARC needs to obtain a certificate of registration under Section 3 of the Securitisation Act, 2002 from the RBI upon fulfillment of the conditions of the Section 3 (3) thereof. Additionally, it must have an owned fund of not less than 15 per cent of the aggregate NPLs acquired or Rs. 100 crore, whichever is lower, subject to a minimum of Rs. 2 crore. Having obtained the certificate of registration, an ARC can undertake both securitisation and asset reconstruction activities. Any entity not registered with the RBI under Section 3 of the Securitisation Act, 2002 may also conduct this business, but outside the purview of the Securitisation Act, 2002.

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