State Bank of India Managing Director PK Gupta has called for evolving a rating mechanism to help banks segregate asset reconstruction companies (ARCs) based on their recovery track record. He observed that one of the complaints made by ARCs, particularly the bigger players, is that the auction system for buying assets from banks does not give any weighting to the track record of ARCs in asset resolution.
"So, some track record on how the assets are resolved by ARCs and SRs (Security Receipts) issued to banks are redeemed will be helpful for banks… That will be important," said Gupta at a summit organised by Assocham on ARCs.