The association of asset reconstruction companies (ARC) has reportedly written to the Reserve Bank of India (RBI) seeking clarity on why the regulator has rejected the resolution plan for Aircel Group.

RBI has rejected the resolution plan submitted by UV Asset Reconstruction Company Limited (UVARCL) for acquiring Aircel’s assets citing that the plan does not conform to the guidelines of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Besides, the central bank has also rejected other insolvency resolution plans submitted by UV ARC apart from that of Aircel.

According to ARC, insolvency and bankruptcy code (IBC) allows asset reconstruction companies to participate in resolution process and it was introduced much later than SARFAESI thus overrides all other previous acts.