New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    As per RBI committee for asset reconstruction companies

    (ARCs), for accounts above_________, two bank-approved external valuers should carry out a valuation to determine liquidation value and fair market value.
    A 300 Crore Correct Answer Incorrect Answer
    B 500 Crore Correct Answer Incorrect Answer
    C 550 Crore Correct Answer Incorrect Answer
    D 600 Crore Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    To streamline the functioning of asset reconstruction companies (ARCs), a Reserve Bank panel has come out with a host of suggestions including the creation of an online platform for the sale of stressed assets and allowing ARCs to act as resolution applicants during the IBC process. To improve the performance of ARCs, the RBI had appointed the committee to examine the issues and recommend measures for enabling ARCs to meet the growing requirements of the financial sector. The committee, headed by former RBI Executive Director Sudarshan Sen, suggested that the scope of Section 5 of the SARFAESI Act be expanded to permit ARCs to acquire financial assets from all regulated entities, including AIFs, FPIs, AMCs making investment on behalf of MFs and all NBFCs including HFCs. For accounts above ₹500 crore, two bank-approved external valuers should carry out a valuation to determine liquidation value and fair market value. “Also, the final approval of the reserve price should be given by a high-level committee that has the power to approve the corresponding write-off of the loan,”.

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