Current Affairs · ARC Regulatory Norms and IAC Waiver
With reference to regulatory amendments concerning Asset Reconstruction Companies (ARCs), which of the following best explains the core rationale behind waiving the Independent Advisory Committee (IAC) approval mandate for specific settlement cases?
- 1To shift the operational burden of resolving fragmented retail loans back to original lending institutions, allowing ARCs to focus resources exclusively on high-value corporate default settlements.
- 2To simplify and accelerate the resolution process of small-ticket retail loans with a principal outstanding up to ₹1 crore, thereby incentivizing ARCs to resolve fragmented non-performing assets efficiently.✓
- 3To mandate that all retail non-performing assets be resolved exclusively through the eBKray platform, thereby bypassing traditional recovery mechanisms and minimizing procedural delays.
- 4To completely eliminate independent oversight mechanisms for all non-performing assets, empowering ARCs to autonomously settle both corporate and retail loans regardless of the principal outstanding.
Correct answer
To simplify and accelerate the resolution process of small-ticket retail loans with a principal outstanding up to ₹1 crore, thereby incentivizing ARCs to resolve fragmented non-performing assets efficiently.
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