| RBI/2008-09/446 |
| DNBS /PD (SC/RC) CC. No. 13 /26.03.001/2008-09 |
April 22, 2009 |
| |
The Chairman/Chief Executive Officer/Managing Director
All registered Securitisation Companies/Reconstruction Companies |
| |
Dear Sir |
| |
Acquisition of Financial Assets by Securitisation
Companies/Reconstruction Companies (SC/RCs) - Clarifications |
| |
| References have been received by the Bank seeking clarifications whether acquisition of financial assets by one SC/RC from another SC/RC will be in conformity with the provisions of SARFAESI Act/ guidelines issued by the Bank in the matter. Further, certain SC/RCs have desired to know if the SC/RCs can deploy their funds for the purpose of restructuring of acquired loans to enable them to realise their dues. |
| |
2. The issues were examined and our response is as under:
(i) A Securitisation Company/Reconstruction Company is neither a ‘bank’ in terms of provisions of Section 2(1)(c) of SARFAESI Act, 2002 nor a ‘financial institution’ in terms of provisions of Section 2(1)(m) of the said Act. Therefore, acquisition of financial assets by one SC/RC from another SC/RC will not be in conformity with the provisions of SARFAESI Act, 2002.
(ii) ‘Restructuring of loans by SC/RC’ is one of the measures allowed to be undertaken by SC/RCs for realisation of their dues. As such, there is no bar on
SC/RCs deploying their funds for undertaking restructuring of acquired loan account with the sole purpose of realizing their dues. |
| |
| |
Yours Sincerely |
| |
| |
(P. Krishnamurthy) |
Chief General Manager In-Charge |
|