Finance Minister Arun Jaitley emphasizing the value of the Insolvency and Bankruptcy Code (IBC) framework to the asset reconstruction companies (ARCs), has said that this framework along with the government’s thrust on resolution represent a unique opportunity for ARCs and private equity (PE) firms, as stressed assets in the banking system still have inherent economic value.
Finance Minister also said that these stressed assets are essentially productive assets and they can be turned around not only to create additional jobs but also to raise national output and added that to achieve this, there is need of timely interventions, transparent price discovery and right management.
While noting government’s efforts towards the cleaning stressed assets, Jaitley said that these efforts which include legislative and regulatory changes, have created an enabling and supportive operational environment for ARCs and for takeover of stressed assets by PE firms/special situation funds. Besides, he said that the increment in market players which indicates an increase interest in the sector also presented an opportunity for banks to offload stressed assets before fully provisioning for them.