The Reserve Bank of India on Friday held a conference in Mumbai for directors and MD/CEOs of Asset Reconstruction Companies (ARCs).
At the event, Deputy Governors M. Rajeshwar Rao and Swaminathan J. addressed the participants.
In his keynote address, M. Rajeshwar Rao highlighted that sound governance provides a strong foundation for the ARCs to build a robust business model.
“The onus in this regard lies largely with the Boards of the ARCs and the top functionaries who will have to develop a strong and institutional culture based on these principles.”
He also stressed on the need for responsible conduct in recovery process and emphasised that ARCs should follow transparent and non-discriminatory practices in line with the comprehensive fair practice code (FPC) put in place by the Reserve Bank.
The conference was attended by over 80 participants representing all 27 ARCs.
Further, in his address, Deputy Governor Swaminathan, emphasised that setting the right tone from the top is crucial in fostering a culture of integrity and ethical conduct.
He highlighted several supervisory concerns in the functioning of ARCs, and urged the ARCs to adopt a regulation plus approach where there is compliance with both the letter of the regulation and also its spirit.
“Boards should accord due importance to assurance functions, namely, risk management, compliance and internal audit. These functions play a critical role in identifying and mitigating risks, ensuring compliance with laws and regulations as well as safeguarding the organization’s reputation,” he said.
The theme of the event was ‘Governance in ARCs – Towards Effective Resolutions’, and is a part of the series of supervisory engagements the Reserve Bank has been organising over the last one year with its Regulated Entities.
As part of this series, the Conference for the Board of Directors and MD/ CEOs of Scheduled Commercial Banks and Urban Co-operative Banks were held earlier.
The Conference included technical sessions on the regulatory aspects and supervisory expectations by the Chief General Managers of the Reserve Bank.
The Conference concluded with an open house interactive session of the participants with the Executive Directors of the Reserve Bank.
Executive Directors S C Murmu, Saurav Sinha, J K Dash, and Rohit Jain along with other senior officials representing the Regulation and Supervision departments of the Reserve Bank also participated in the Conference.