Section 5(1

Section 5(1A), inserted by Act 44 of 2016, expressly provides that any document executed by any bank or financial institution under Section 5(1) in favour of the ARC for the purpose of asset reconstruction or securitisation shall be exempted from stamp duty in accordance with the provisions of Section 8F of the Indian Stamp Act, 1899. The proviso clarifies that this exemption does NOT apply where the acquisition of financial assets by the ARC is for purposes other than asset reconstruction or securitisation. This stamp duty exemption was introduced to reduce transaction costs involved in stressed asset sales and to encourage the market for distressed debt. Section 8F of the Stamp Act was specifically inserted to give effect to this exemption.