REGULATING NON-BANKING

This role is, perhaps, the most unheralded aspect of our activities, yet it remains among the most critical. This includes ensuring credit availability to the productive sectors of the economy, establishing institutions designed to build the country’s financial infrastructure, expanding access to affordable financial services and promoting financial education and literacy.

Notifications

(97 kb)
Date : Dec 06, 2019
Acquisition of financial assets by Asset Reconstruction Companies from sponsors and lenders

RBI/2019-20/110
DOR.NBFC(ARC) CC. No. 8/26.03.001/2019-20

December 6, 2019

All Asset Reconstruction Companies

Madam/ Sir,

Acquisition of financial assets by Asset Reconstruction Companies from sponsors and lenders

Please refer to para 2(A) of Circular DNBS (PD) CC.No.37/SCRC/26.03.001/2013-2014 dated March 19, 2014.

2. On a review, it has been decided that Asset Reconstruction Companies (ARCs) shall not acquire financial assets from the following on a bilateral basis, whatever may be the consideration:

(i) a bank/ financial institution which is the sponsor of the ARC;

(ii) a bank/ financial institution which is either a lender to the ARC or a subscriber to the fund, if any, raised by the ARC for its operations;

(iii) an entity in the group to which the ARC belongs.

However, they may participate in auctions of the financial assets provided such auctions are conducted in a transparent manner, on arm’s length basis and the prices are determined by market forces.

Yours faithfully,

(Manoranjan Mishra)
Chief General Manager

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