Asset reconstruction companies facing slowdown in loan recoveries due to pandemic: Icra

The ratings of security receipts (SRs) issued by ARCs have seen downgrades due to delay in recoveries and decline in expected recovery value on the SRs.

Asset reconstruction companies (ARCs) are facing slowdown in recoveries from bad loans procured from banks due to failed auctions, absence of bidders and delay in payments amid COVID-19 pandemic, according to a report.

The ratings of security receipts (SRs) issued by ARCs have seen downgrades due to delay in recoveries and decline in expected recovery value on the SRs.

“The recovery for the ARCs are getting affected due to deferment or failure of auctions due to unsatisfactory bids or absence of any bidders, default or delay in payment as per the agreed settlement plan or agreed restructuring terms,” rating agency Icra said in its report.

Besides, resolution under Insolvency and Bankruptcy Code (IBC) proceedings has seen a sharp slowdown in the first quarter of

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