Asset Reconstruction Companies (ARCs)

Asset Reconstruction Companies (ARCs) are specialized financial institutions that purchase defaulted or distressed loans from banks and financial institutions. Their goal is to recover value from these bad assets by restructuring, managing, or selling them. This process helps banks clear their balance sheets, improve liquidity, and focus on new lending, while ARCs aim to recover as much value as possible through their expertise in asset management. Essentially, ARCs act as intermediaries that transform problematic loans into potentially recoverable assets, contributing to financial stability and efficient credit flow in the economy.