Asset Reconstruction Companies will have to deduct

Solution

    The Reserve Bank of India ( RBI ) directed asset reconstruction companies ( ARCs ) to deduct management fees from their capital where certain criterion is not met .   It will address the prudential concerns arising from continued recognition of unrealised income .   The RBI has directed ARCs to deduct from net owned funds where the management fee is not realised in 180 days from the planning period, irrespective of when the fees were recognised . Similarly, ARCs will have to deduct unrealised management fees where the net asset value of security receipts has fallen below 50 % of the face value .