 Mumbai:
The Reserve Bank of India (RBI) has said that an asset
reconstruction company (ARC) will have to maintain a minimum
capital adequacy ratio (CAR) of not less than 15 per cent
of its total risk-weighted financial assets on an ongoing
basis.
The
risk weight for all assets except government securities
(both state and central), and cash and bank balances,
will be 100, the central bank has suggested.
The
RBI has proposed an organisation structure similar to
mutual funds. According to the operational structure envisaged,
an ARC will set up one or more trusts, which will issue
security receipts to “qualified institutional buyers.”
The trusteeship will be with the board of directors of
the ARC. The company will have to declare net asset values
of the security receipts under each scheme every quarter.
The
draft norms said ARCs will have to chalk out a restructuring
plan for each asset, clearly spelling out how and in what
time the asset will be recast and its value realised,
within one year of acquiring it. During the planning period,
the assets purchased for reconstruction will be treated
as standard assets.
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