Asset rejig companies face March deadline to raise capital

1 year ago 11

MUMBAI: Nearly a third of the 27

asset reconstruction

companies must raise

capital

by March 2024 to comply with

RBI

's requirement of a minimum capital of Rs 200 crore.
In October 2022, RBI set new guidelines requiring

ARCs

to raise capital to Rs 200 crore by March 2024 and Rs 300 crore by March 2026, replacing the earlier minimum capital requirement of Rs 100 crore for licencing.

10 ARCs need capital for the Rs 200 crore requirement by March 2024, and 18 must meet the Rs 300 crore stipulation by March 2026. Additionally, RBI mandates Rs 1,000 crore for ARCs aiming to become resolution applicants in

insolvency cases

.
Concerns have arisen that increased capital requirements may deter new entrants focusing on small businesses. Industry insiders argue that large corporate defaults are cyclical, with most already addressed - the next wave is anticipated from micro, medium, and small enterprises, requiring lower resolution capital.

Article From: timesofindia.indiatimes.com

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