BUSINESS

Asset rehabilitation businesses have a solid base thanks to sound governance: RBI

The MDs and CEOs of Asset Reconstruction Companies (ARCs) as well as directors attended a symposium hosted by the Reserve Bank of India on Friday in Mumbai.

 

Deputy Governors M. Rajeshwar Rao and Swaminathan J. spoke to the attendees during the ceremony.

M. Rajeshwar Rao emphasized in his keynote speech that the ARCs may develop a solid economic model with the support of competent governance.

“The top functionaries and the Boards of the ARCs bear a major portion of the responsibility in this regard as they must establish a solid institutional culture based on these principles.”

Additionally, he emphasized the requirement of responsible behavior throughout the recovery process and the need for ARCs to adhere to open, non-discriminatory standards in accordance with the Reserve Bank’s complete fair practice code (FPC).

More than 80 individuals, representing all 27 ARCs, attended the conference.

Furthermore, Deputy Governor Swaminathan emphasized in his speech the need of establishing a culture of integrity and ethical behavior by starting at the top.

He called attention to a number of supervisory issues with the way ARCs operate and pushed ARCs to use a regulation-plus approach, meaning that both the text and the spirit of the law be followed.

“Boards should provide assurance functions, such internal audit, risk management, and compliance, the attention they deserve. These duties are essential for detecting and reducing risks, making sure that rules and regulations are followed, and preserving the organization’s reputation, the speaker stated.

The event, which had “Governance in ARCs – Towards Effective Resolutions” as its topic, was one of the supervisory engagements that the Reserve Bank has been holding with its Regulated Entities over the last year.

The conference for the MDs and CEOs of Scheduled Commercial Banks and Urban Co-operative Banks was held previously in this series.

The Chief General Managers of the Reserve Bank led technical sessions during the conference on regulatory issues and supervisory standards.

An open-door interaction session between conference attendees and Reserve Bank Executive Directors marked the conclusion of the event.

Senior officials from the Reserve Bank’s Regulation and Supervision divisions, as well as Executive Directors S. C. Murmu, Saurav Sinha, J. K. Dash, and Rohit Jain, attended the conference.

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