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ARTICLE · 05 OCTOBER 2026

RBI's FAQ Eases ARC Entry Into The IBC Arena

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The Reserve Bank of India (RBI) had via Master Directions dated 28 November 2025 titled Reserve Bank of India (Asset Reconstruction Companies) Directions, 2025 (Master Directions 2025) for the first time allowed Asset Reconstruction Companies (ARCs) to act as resolution applicant(s) under the Insolvency and Bankruptcy Code, 2016 (Code) subject to compliance of certain conditions which inter alia included an ARC to maintain a net owned fund (NOF) of INR 1,000 crore.

IndiaInsolvency/Bankruptcy/Re-Structuring
Siddharth Srivastava
Siddharth Srivastava
Mohit Kishore
Mohit Kishore
Shikha Mohini
Shikha Mohini
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A. Background

The Reserve Bank of India (RBI) had via Master Directions dated 28 November 2025 titled Reserve Bank of India (Asset Reconstruction Companies) Directions, 2025 (Master Directions 2025) for the first time allowed Asset Reconstruction Companies (ARCs) to act as resolution applicant(s) under the Insolvency and Bankruptcy Code, 2016 (Code) subject to compliance of certain conditions which inter alia included an ARC to maintain a net owned fund (NOF) of INR 1,000 crore. The RBI has in an FAQ dated 11 September 2026 (FAQ) inter alia clarified that all such compliances may not be followed by an ARC when acting as a resolution applicant under the Code unless the activities envisaged to be undertaken as part of the resolution plan are not included in the activities permitted to an ARC under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).

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