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    Question

    Under which act are Asset Reconstruction Companies (ARC)

    established, as announced by the RBI in April 2021 when it constituted a committee chaired by Sudarshan Sen to review the legal and regulatory framework applicable to ARCs? 
    A The Payment and Settlement Systems Act, 2007 Correct Answer Incorrect Answer
    B The Industrial Finance Corporation (Transfer of Undertakings and Repeal) Act, 1993 Correct Answer Incorrect Answer
    C The Factoring Regulation Act, 2011 Correct Answer Incorrect Answer
    D The Deposit Insurance and Credit Guarantee Corporation Act, 1961 Correct Answer Incorrect Answer
    E Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 Correct Answer Incorrect Answer

    Solution

    The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 provides the legal basis for the setting up of ARCs in India.

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