Banks, FIs finalise ARC structure

The other stakeholders of the company—Asset Reconstruction Company India Ltd (ARCIL)—are IDBI Bank, HDFC Bank, Federal Bank and South Indian Bank. “There could be two revenue streams for the company—a fixed management fee and the profit arising from the sale of reconstructed assets,” said ICICI Bank’s assistant general manager Kalpesh Kikani at a seminar on ‘Lending in India-Toward a New Paradigm’ covering aspects relating to security enforcement, asset reconstruction and securitisation held in Mumbai.

ARCIL was formed following the trust-model adopted in south-East Asian countries. This will operate on the lines of a mutual fund and has already been registered in conjunction with the announcement of the Finance Minister in the last Budget that an ARC would be set up by end-June 2002. The company will start with an initial capital of Rs 10 crore. “Capital would only be utilised for establishing the systems and ensuring the operations of the ARC,” Kikani said. The IFCI CMD, VP Singh, said that foreign investors have evinced interests in the Asset Care Enterprise Ltd, the asset reconstruction company being floated by the IFCI.