Under the provisions of the SARFAESI Act, 2002,

Solution

• The SARFAESI Act, 2002 empowers banks and financial institutions to recover their dues without court intervention by taking possession of secured assets of defaulting borrowers. • To aid this process, the Act provides for the creation of Asset Reconstruction Companies (ARCs), which are regulated by the RBI. • ARCs acquire stressed assets or NPAs from banks and financial institutions, then try to restructure, securitize, or liquidate them to recover value. • Popular examples in India include ARCIL (Asset Reconstruction Company India Ltd). Thus, in SARFAESI context, ARC stands for Asset Reconstruction Company.