Asset Reconstruction Company also known as ‘ARC’, is a company registered under the companies act 2013 and is established for the purpose of securitization. An ARC shall be mandatorily registered with the RBI in accordance with the provisions of Section 3 of the SARFAESI Act. Asset Reconstruction Companies (ARC’s) are specialized financial institutions that buy the bad loans, Non-Performing Assets (NPAs) from banks & financial institution so that the banks and financial institutions have a cleaner balance sheet and enhanced liquidity.

A. Company registered under the company act 2013 for the purpose of securitization & get registration from RBI as per SARFAESI act under section 3 is called as Asset Reconstruction Company (ARC). The main business of asset Reconstruction Company is to buying bad loan from bank. These are specialized financial institution that buys the bad loan, Non Performing Assets (NPAs) from banks & financial institution so that to clean up their balance sheet.It act as recovery agent for the banks as it take over the loan and advances from bank and financial institution for recovery.

On and after the commencement of this Act, assets reconstruction company shall make an application for registration to the Reserve Bank before the expiry of six months from such commencement and cannot carry on the business of securitisation or asset reconstruction until a certificate of registration is granted to it or as the case may be, rejection of application for registration is communicated to it.