New Market Policy

Inter-bank purchase/sale of NPAs has been allowed in July 2005, leading to significant portfolio buy-outs through competitive bidding process. Further, Foreign Direct Investment in equity of ARCs and participation of Foreign Institutional Investors (FIIs) in Security Receipts (SRs) of ARCs has been allowed by RBI in November 2005. The said dispensations are expected to facilitate cash buy out of NPAs through induction of third party investor money. The above measures are a welcome development for creation of a vibrant market for investment in NPAs, in the country.