The Reserve Bank of India (RBI) Governor Raghuram Rajan, on Tuesday, said that the apex bank would announce some measures on asset reconstruction companies (ARCs) soon. “Over the next few days, I hope we will be able to announce some measures on asset reconstruction companies,” said Dr. Rajan at a press conference here.
The idea was to broadly ensure that the financial assets were dealt with in a way to ensure maximum value for the underlying real assets and to put the economy back on track in terms of growth, he said. “If there are distressed assets, can we bring in new equity? If there is restructuring that is needed, will the banks do that quickly? If there are assets to be sold, can that be done speedily? Time, often, is the most important thing,” he added.
“The longer you wait, the more distressed the asset becomes,” said Dr. Rajan. “In an environment where we see growth picking up, if we can deal with these problems and put these assets back on track quickly — they will add to growth and the overall losses to the system will be substantially diminished than where they are now. So, our main effort is to get movement on all these sides and to prevent parking or neglect of these assets,” he added.
