Asset Reconstruction Company (ARC)

Asset Reconstruction Company (ARC) Definition: An Asset Reconstruction Company (ARC) is a specialized financial institution that buys NPAs or bad assets from banks and NBFCs, allowing lenders to clean up their balance sheets quickly while the ARC focuses solely on the recovery.

Why it matters in Debt Collection

• Regulated by the RBI under the SARFAESI Act.
• ARCs typically buy bad loans at a discounted price.
• ARCs have absolute powers to restructure the loan or enforce security interests without court intervention.