The deal between Suraksha Asset Reconstruction Company (ARC) and Yes Bank has come under the scanner after a former director raised concerns over alleged irregular fund routing. The development has triggered debates about transparency in India’s stressed asset resolution framework.
According to regulatory filings and insider accounts, the ex-director alleged that certain funds connected to the ARC transaction may have been routed through non-transparent channels, raising red flags about compliance and governance. While the details remain under examination, the concerns add to the broader scrutiny around India’s ARC sector, which manages billions of rupees in distressed assets.
Yes Bank, which has been under constant regulatory and investor watch since its bailout in 2020, has not issued a detailed response to the claims. However, sources within the bank maintain that all transactions related to Suraksha ARC were executed in compliance with Reserve Bank of India (RBI) guidelines.
Industry analysts point out that the controversy could impact confidence in ARC-led debt resolution mechanisms. Suraksha ARC, which has been active in acquiring large stressed loan portfolios, is already in the spotlight due to its role in high-profile insolvency proceedings. Any indication of fund mismanagement could prompt tighter RBI oversight.
Experts say that this episode underlines the urgent need for stronger disclosures, independent audits, and enhanced governance standards in India’s asset reconstruction business. With banks increasingly relying on ARCs to clean up balance sheets, credibility is key to ensuring investor trust.
The allegations, if proven, may attract regulatory intervention and potential penalties. For now, both Suraksha ARC and Yes Bank face questions from stakeholders and regulators, keeping the spotlight firmly on their deal-making practices.
