Has the economic slowdown resulted in above-normal-profit cases getting affected?
During a slowdown, deals in which resolution and recovery are linked to infusion of funds by third-party investors are generally affected due to unfavourable investor sentiment. Last year, that was an issue. So, the holding cost goes up, affecting profitability. ARCs are required to realise the value from NPAs within five years, whereas there is no such limit for others in the system. It is, therefore, a challenge for ARCs to maximise returns within the given period. You were raising a $600 million (around Rs 3,000 crore) fund. Have you raised it? The effort is on. We are looking to raise Rs 3,000 crore with multiple closings over the next 18-24 months. The challenge is that we need a domestic holding of not less than 51 per cent of the fund size and only banks and insurance companies can be expected to participate. While banks have their own NPA portfolios to manage and are cautious while committing to financing acquisition of other banks’ NPAs, insurance companies cannot be expected
