RBI vide circular dated October 11, 2022 has revised Regulatory Framework for Asset Reconstruction Companies (ARCs). In terms of the provisions of the SARFAESI Act, prior approval of the Reserve Bank of India is required for appointment/ re-appointment of a director or MD/ CEO.
The revised framework mandates that ARCs shall undertake due diligence to determine the suitability of the person for the post, based upon track record, integrity and other ‘fit and proper’ criteria. For this purpose, ARCs shall obtain necessary information and declaration from the appointed/ existing directors and MD/ CEO in the prescribed format.
