Hello,

Yes, the history of arrears affect the IIM Selection process. They check your marks of 10th, 10+2 and Graduation. The backlogs might put bad impression during PI round. But still you are eligible and you may give entrance and might be shortlisted. So give it a chance and prepare yourself to face questions regarding history of arrears in PI. If you will be able to face them then you may get through IIM. Many people have been in IIM with their history of arrears.

All the best!