- ARCs are companies registered with RBI.
- Their purpose is to carry on the business of asset reconstruction or securitization.
- Under the Act, ARCs can acquire rights or interests in any debt/loan/advance from banks.
- This is for the purpose of realization/recovery of such debt.
- They can also acquire financial assets to convert them into marketable securities (securitization).
- ARCs help banks clean up their balance sheets by taking over bad loans.