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RBI refuses to let asset reconstruction companies bid for insolvent assets

The immediate impact of the RBI’s decision will be felt by UV Asset Reconstruction Company, which was awaiting approval to take over telco Aircel.
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19 Sep 2020 2 Mins Read 0 comment
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Mumbai: The Reserve Bank of India has refused to let asset reconstruction companies act as resolution applicants in insolvency cases, a stance that could halt the proceedings involving Aircel and Reliance Communications. At a meeting between Association of ARCs in India and RBI officials, the central bank refused to budge from its position despite pleas that it would impact
both Aircel and RCom. The ARC association had written to RBI governor Shaktikanta Das, emphasising their role in reviving stressed companies. ARCs are worried because they are involved in many resolution plans awaiting closure. Recently ARCs including JM Financial ARC, ARCIL, Phoenix bid for Reliance Naval and Engineering, while Suraksha ARC expressed its interest to buy debt-laden realtor HDIL.
Mumbai: The Reserve Bank of India has refused to let asset reconstruction companies act as resolution applicants in insolvency cases, a stance that could halt the proceedings involving Aircel and Reliance Communications. At a meeting between Association of ARCs in India and RBI officials, the central bank refused to budge from its position despite pleas that it would impact both Aircel and RCom. The ARC association had written to RBI governor Shaktikanta Das, emphasising their role in reviving stressed companies. ARCs are worried because they are involved in many resolution plans awaiting closure. Recently ARCs including JM Financial ARC, ARCIL, Phoenix bid for Reliance Naval and Engineering, while Suraksha ARC expressed its interest to buy debt-laden realtor HDIL.

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