Guidelines and Directions for Securitisation and Reconstruction Companies
The Reserve Bank of India (RBI) has issued guidelines and directions for securitisation and reconstruction companies, which are applicable to all companies engaged in securitisation and reconstruction activities.
Registration and Owned Fund: Companies must register with the RBI and maintain a minimum owned fund of ₹2 crore.
Permissible Business: Companies can engage in activities such as acquisition of financial assets, change in or take over of management, sale or lease of a part or whole of the business of the borrower, rescheduling of debts, enforcement of security interest, and settlement of dues payable by the borrower.
Asset Reconstruction: Companies can convert debt into shares of a borrower company, and must have a plan for realisation of assets.
Other Provisions: The guidelines also cover matters such as change in management, sale or lease of business, rescheduling of debts, and enforcement of security interest.
The guidelines aim to regulate and supervise securitisation and reconstruction companies to ensure their smooth functioning and to protect the interests of stakeholders.
Chat with the Master Circular: