An ARC should not be limited to buying and selling financial securities, but must be free to buy and sell the underlying assets of bad loans as well, a role RBI has deemed it fit to deny it, notwithstanding the express mandate of Section 5(3) of the Sarfaesi Act that all the rights of the lender over the borrower flowing from the credit relationship will be transferred to the ARC when the ARC takes over the bad loan from the original lender.
