Full formBanking & Finance
DRVstands forDebt Recovery Vehicle
Full Form of DRV
What is DRV?
A Debt Recovery Vehicle (DRV) is a special purpose entity created by banks or asset reconstruction companies (ARCs) in India to acquire and resolve non-performing assets (NPAs). It functions as a ring-fenced vehicle that pools distressed loans, enabling efficient recovery through restructuring, auction, or sale. DRVs are governed by RBI guidelines and the Insolvency and Bankruptcy Code (IBC). They are commonly used in corporate debt resolution, particularly for large stressed accounts. DRVs help banks clean up their balance sheets and improve liquidity. For Indian exams like RBI Grade B or SEBI, understanding DRVs is essential as they form a key component of the financial system's recovery mechanism. The use of DRVs has gained prominence under the IBC framework, where they facilitate faster resolution of bad loans and reduce the burden on the banking sector. This mechanism also aligns with the government's efforts to strengthen the financial ecosystem and promote credit discipline.
DRV का फुल फॉर्म
ऋण वसूली वाहन
Example
The bank transferred its bad loans to a DRV for faster resolution under the IBC framework.
DRV — frequently asked questions
What is the full form of DRV?
The full form of DRV is Debt Recovery Vehicle.
How is DRV used in Indian banking?
DRV is used to acquire and resolve non-performing assets, helping banks recover dues and clean their balance sheets under RBI and IBC norms.
Is DRV regulated by RBI?
Yes, DRVs operate under RBI guidelines and the Insolvency and Bankruptcy Code, ensuring compliance with the regulatory framework for distressed asset resolution.