The Indian Institute of Corporate Affairs (IICA) has signed a five-year Memorandum of Understanding with the Association of ARCs in India to bring asset reconstruction industry experience into its Post Graduate Insolvency Programme (PGIP). The pact was signed on 22 October 2026 in New Delhi and will run for five years. It connects classroom learning on insolvency with live work on bad loans, debt restructuring and distressed assets.
What Is the Indian Institute of Corporate Affairs?
The Indian Institute of Corporate Affairs, short for IICA, is an autonomous institute under the Ministry of Corporate Affairs. IICA functions as a think tank, research body and training institute for corporate regulation, governance and policy. IICA is a government body, not a private university. It was registered as a society on 12 September 2008 under the Societies Registration Act, 1860 and its campus is located at IMT Manesar in Gurugram, Haryana.
IICA brings together government, regulators and industry on a common platform. The institute supports the central government with capacity building, research, advocacy and consultancy. It trains officers of the Indian Corporate Law Service and conducts courses for directors, professionals and officials. The Director General and Chief Executive Officer of IICA is Gyaneshwar Kumar Singh (as of October 2026). The Ministry had convened a meeting on 2 September 2026 to align IICA training with industry needs, and the present MoU carries that plan forward.
What Is an Asset Reconstruction Company?
An Asset Reconstruction Company (ARC) is a specialised financial institution that buys Non-Performing Assets (NPAs), or bad loans, from banks and financial institutions to clean their balance sheets. ARCs are registered with the Reserve Bank of India (RBI) under Section 3 of the SARFAESI Act, 2002 and work within the framework issued by RBI.
The full form of SARFAESI is the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Act gives legal backing for setting up ARCs and lets banks enforce security without initial court intervention. The idea traces back to the Narasimham Committee on Banking Sector Reforms (1998), which suggested hiving off bad loans into a separate vehicle. The first ARC, Asset Reconstruction Company (India) Ltd (ARCIL), was registered in 2003. There are 27 ARCs registered with RBI (as of March 2026).
How Does an Asset Reconstruction Company Work?
An ARC in banking works as a bridge between stressed borrowers and lenders seeking recovery. The ARC buys bad loans from a bank at a negotiated price, often paying part in cash and part through Security Receipts (SRs). These receipts give the selling bank a share in future recoveries. The ARC then tries to recover value through rescheduling of debt, settlement with the borrower, sale or lease of secured assets, management of the borrower business, or sale of the loan to other investors.
ARCs earn through management fees, usually around 1.5 to 2 percent per year, and a share in recoveries above costs. They cannot undertake regular lending. Their business is limited to securitisation, asset reconstruction and functions listed in Section 10 of the SARFAESI Act. RBI requires a minimum Net Owned Fund of ₹300 crore to start ARC business, with a glide path to higher capital for larger roles. This structure helps banks focus on fresh lending while specialists handle recovery.
What Is Insolvency and Who Is an Insolvency Professional?
Insolvency is a financial condition where a person or company cannot pay its debts on time. Bankruptcy is the legal process that follows when insolvency is resolved through courts or tribunals. In India, corporate insolvency is governed by the Insolvency and Bankruptcy Code, 2016 (IBC). The Code provides time bound resolution to revive viable firms or liquidate unviable ones.
An Insolvency Professional (IP) is a licensed practitioner who manages this process. The IP takes charge of the debtor company, verifies claims, runs the committee of creditors and guides the resolution plan. An IP must be enrolled with an Insolvency Professional Agency (IPA) and registered with the Insolvency and Bankruptcy Board of India (IBBI). IBBI was set up in 2016 under the IBC and functions under the Ministry of Corporate Affairs. It regulates IPs, agencies and information utilities.
How to Become an Insolvency Professional?
The standard route requires professional experience plus qualifying tests. A chartered accountant, company secretary, cost accountant or advocate needs 10 years of practice experience. A graduate in law needs 10 years of experience, while other graduates need 15 years in management. Every candidate must pass the Limited Insolvency Examination and complete a Pre-registration Educational Course before applying to IBBI for registration.
The Post Graduate Insolvency Programme (PGIP) offers a fast track for young graduates. PGIP is a two year programme run by IICA through its Centre for Insolvency and Bankruptcy at Manesar. It combines about 12 months of residential classroom learning with about 12 months of internship in live practice. A student who completes PGIP can seek registration as an IP without waiting to gather 10 years of experience. PGIP is recognised by IBBI. Admission is through a written test called GIPCET, followed by group discussion and interview. The eighth batch opened registrations on 15 January 2026 with classes from 1 July 2026. Eligibility covers chartered accountants, advocates, cost accountants, company secretaries, engineering graduates and postgraduates in economics, finance, commerce and management with 50 percent marks.
What Does the Five-Year IICA-ARC MoU Cover?
The Association of ARCs in India is the representative body of ARCs registered with RBI. The MoU was signed by Amrinder Puri, Chief Administrative Officer of IICA, and Hari Hara Mishra, Chief Executive Officer of the Association, in the presence of the Director General of IICA. The agreement is valid for five years and provides a structured plan for joint work, with regular review of progress.
The pact focuses on the PGIP run by IICA. The PGIP trains Insolvency Professionals and Turnaround Specialists. Industry experts from ARCs will join as faculty and help reshape course modules to match current market needs. The two sides will take up joint research on debt restructuring, financial markets, stressed assets and insolvency resolution. Data sharing will support evidence based studies, subject to legal, regulatory and confidentiality limits. The partners will also explore internships and placement support for PGIP students and hold an annual joint conference for practitioners and scholars.
| Pillar of Cooperation | What It Involves |
|---|---|
| Industry-oriented curriculum | ARC professionals teach PGIP batches and update modules on valuation, restructuring and recovery practice |
| Research and data sharing | Joint studies on stressed assets and markets, with shared datasets within legal safeguards |
| Industry engagement | Internships, placement linkages and an annual conference on emerging insolvency issues |
Why ARCs Matter for Insolvency Resolution in India
ARCs play a direct role in cleaning bank balance sheets and in reviving stressed firms. Banks sell loans that have turned into NPAs to ARCs at a discount. This removes sticky assets from bank books and releases capital for fresh credit. The scale is large. RBI data placed before Parliament shows the cumulative book value of assets acquired by ARCs at ₹18,78,007 crore as on 31 March 2026, up from about ₹6,29,314 crore as on 31 March 2022.
A key policy change raised the profile of ARCs. On 11 October 2022, RBI issued the framework titled Review of Regulatory Framework for Asset Reconstruction Companies (RBI/2022-23/128). The framework followed the recommendations of the Sudarshan Sen Committee. It allowed eligible ARCs to act as resolution applicants under the IBC, subject to conditions. This lets ARCs bid for stressed companies in the Corporate Insolvency Resolution Process and use their skills in valuation and restructuring. It also links ARC work closely with the duties of Insolvency Professionals, which is why PGIP students need exposure to ARC practice.
India also has a public sector ARC structure for large bad loans. The National Asset Reconstruction Company Ltd (NARCL), often called the bad bank, was incorporated on 7 July 2021 after an announcement in the Union Budget 2021-22. NARCL is sponsored by public sector banks with Canara Bank as sponsor and works with India Debt Resolution Company Ltd (IDRCL) for management and resolution. NARCL focuses on loans with exposure of ₹500 crore and above and uses a mix of cash and Security Receipts backed by government guarantee. Private ARCs, in contrast, are sponsored by banks, finance companies and investors and now operate largely on cash deals. The MoU does not change these structures. It builds a talent pool that can work across both private ARCs and public institutions.
The Way Forward
The immediate test lies in turning the MoU into classroom and market outcomes. IICA and the Association plan to put an implementation plan in place, with ARC experts taking sessions and mentoring interns. Joint research papers and market trend notes are expected to feed back into PGIP teaching. Placement linkages will be watched closely, since the programme promises employability from the second year.
The partners have also discussed a joint conference in February 2027 to mark two milestones. The IBC completes 10 years in 2026 and the SARFAESI Act completes 25 years in 2027. The theme and programme will be finalised jointly. The event is expected to review debt recovery experience, the role of ARCs as resolution applicants and reforms needed in the legal framework for stressed assets.
Key Takeaways
- IICA signed a five-year MoU with the Association of ARCs in India on 22 October 2026 to strengthen industry linkage for the Post Graduate Insolvency Programme.
- IICA was registered on 12 September 2008 under the Ministry of Corporate Affairs and is headquartered at IMT Manesar, Haryana.
- ARCs are registered with RBI under Section 3 of the SARFAESI Act, 2002, with 27 ARCs in operation as on March 2026.
- PGIP graduates can register as Insolvency Professionals with IBBI without the usual 10-year experience requirement.
- Eligible ARCs can act as resolution applicants under the IBC, 2016 since the RBI framework of 11 October 2022 based on the Sudarshan Sen Committee.
