ARC executives find written-off assets particularly appealing as the number of sizeable bad loans awaiting recovery have dipped, thanks in part to banks’ persistent corrective measures, including selective targeting of corporate borrowers.
"The other segment is some assets, for example in the IL&FS case, which were categorised as red based on the solvency rate and cash flows. Such difficult assets can be acquired by ARCs (asset reconstruction companies) at a discount which means debt levels will come down and servicing capacity with the same cash flow may go up. ARCs can give a longer time frame for repayment which will improve the ability of the existing cash flow to service the debt at that particular time," Mohapatra said.
"The other segment is some assets, for example in the IL&FS case, which were categorised as red based on the solvency rate and cash flows. Such difficult assets can be acquired by ARCs (asset reconstruction companies) at a discount which means debt levels will come down and servicing capacity with the same cash flow may go up. ARCs can give a longer time frame for repayment which will improve the ability of the existing cash flow to service the debt at that particular time," Mohapatra said.
Arcil: Arcil FY23 net profit up 67% on higher recoveries indiatimes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from indiatimes.com Daily Mail and Mail on Sunday newspapers.
The feared loan recovery agent is back‚ sending borrowers scurrying for cover. A BT investigation gives a ringside view of the dark underbelly of the consumer loan recovery business and the regulatory gaps that they exploit