New Delhi, Oct 02: Asset reconstruction companies, set up to assist banks and FIS in reducing their non-performing assets pegged at over Rs 90,000 crore, are all set to start operations shortly. "Of the one dozen applications for arcs, two have got licence from reserve bank and another -- international asset reconstruction company -- is expected to get it shortly," banking secretary N S Sisodia told a news agency.
The two Arcs, which have already got licence are Asset Reconstruction Company of India Ltd (Arcil) and Asset Care Enterprise (ACE), he said. Arcil is promoted by ICICI Bank, IDBI, State Bank of India with 24.5 per cent stake each. Arc would start with bad assets worth Rs 7,000 crore mainly transferred by FIS like IDBI and ICICI.

Ace is promoted by IFCI, Tourism Finance Corporation, Punjab National Bank, Life Insurance Corporation, Bank of Baroda and United Bank of India.

IFCI will hold 33 per cent in ace, while PNB has picked up 26 per cent, TFCI 10 per cent. LIC, BOB and UBI will have 10 per cent each in ACE. It will start with Rs 2,250 crore of NPAs of IFCI alone, along with bad assets of other banks and FIS. The ARCS would take up NPAs from banks and strive to recover them faster taking advantage of the Securitisation and Reconstruction of Finance Assets and Enforcement of Security Interest Act.
The amount of NPAs to be taken up by the arcs would go up gradually as the companies gather momentum.

The third Arc is being promoted by private banks and institutions, Sisodia added. Bureau Report