---
title: "Asset Reconstruction Company (ARC): NPA Recovery"
description: "An Asset Reconstruction Company (ARC) acquires non-performing assets from banks in India, helping to recover value and stabilize the financial system."
url: "https://modeldiplomat.com/learn/glossary/asset-reconstruction-company"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- An Asset Reconstruction Company is a financial institution registered with the Reserve Bank of India that acquires non-performing assets from banks and works to recover or restructure them.
- What is the legal basis for an Asset Reconstruction Company in India?
- What is the 15:85 structure used by ARCs?
- How does an ARC differ from the IBC resolution process?
- What is the National Asset Reconstruction Company Limited (NARCL)?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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In 2021, India established the National Asset Reconstruction Company Limited (NARCL), a government-backed "bad bank," to aggregate large stressed assets from public-sector banks, supported by a ₹30,600 crore central government guarantee on its security receipts.

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