ARCs in India operate under the provisions of Securitisation andReconstruction of Financial Assets and Enforcement of Security Interest, Act 2002 (SARFAESI). They play a catalytic role in the realization of optimum value from distressed financial assets of Banks &FIs rendered unproductive for reasons ranging right from economic slowdown to excessive competition. Against this backdrop Assets Care and Reconstruction Enterprise has carved out a niche for itself as a resourceful, professionally managed business revival catalyst. Under its well-crafted Assets acquisition policy, ACRE focuses on acquisition of financial assets that can be resolved in a relatively shorter time frame. It responds to the sale of Non-Performing Assets by Banks &FIs by participating in the auctions from time to time. ACRE also enters into bilateral transactions with Bank &FIs, for the purpose of acquisition of the NPAs. The Assets are acquired either on cash basis or by issuing Security Receipts (SRs) or a combination of both. In case of cash purchase, assets are taken on the balance sheet of ACRE, while in case of SRs, a trust is set up which holds the acquired assets. ACRE acts as the trustee. The trust issues assets backed SRs to the investor which may be the selling Bank &FIs, ACRE and/or any other Qualified Institutional Buyer (QIB). ACRE also performs the role of a bridge between potentially viable sick assets & the investors looking for avenues of investment in distressed assets.

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