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NARCL entry shoves global funds out of ARC business

June 27, 2025

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Financial Express Chandigarh

Unfair Competition

- MAHESH NAYAK

THE ENTRY OF government-backed National Asset Reconstruction Company (NARCL) into the asset reconstruction business is driving out private companies in the space, especially those backed by global funds.

"ARCs are struggling to compete with NARCL, with the sovereign guarantee on security receipts (SRs) issued by the firm for acquiring non-performing assets (NPAs) being the biggest dampener, and also one of the reasons behind global funds and domestic ARCs winding up their businesses in India," said the CEO of a private ARC.

NARCL offers a 15:85 structure—15% upfront cash and 85% in sovereign-guaranteed SRs—making it a safer and more attractive option for banks. Private ARCs, naturally, can't match it.

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