RBI deputy governor urges ARCs to implement revised framework, says failure may lead to strict action

Rao was delivering keynote address at conference on ‘Governance in ARCs – Towards Effective Resolutions’ held at Mumbai on May 17.

The Reserve Bank of India's (RBI) Deputy Governor M Rajeshwar Rao urged all asset reconstruction companies (ARC) to implement revised framework and failure will lead to strict supervisory and enforcement action, if warranted.

"However, what we observe is that not all ARCs have implemented the revised guidelines on composition and functioning of the Board. I would take this opportunity to urge all ARCs to implement these guidelines in right spirit. Also, failure to meet regulatory guidelines and wilful violations would invite strict supervisory and enforcement action, if warranted," Rao said.

Rao was delivering keynote address at a conference on ‘Governance in ARCs – Towards Effective Resolutions’, held at Mumbai on May 17.

The regulatory framework of ARCs was comprehensively reviewed by a Committee constituted by the Reserve Bank (Chair: Sudarshan Sen). Based on these recommendations we have issued a set of revised instructions in October 2022 and they have also been subsequently incorporated in the comprehensive Master Directions on ARCs issued on April 24, 2024, said Rao.