RBI notifies regarding acquisition of financial assets by Asset Reconstruction Companies

Dec 06, 2019 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Reserve Bank of India on December 06, 2019, vide Circular No. DNBS (PD)CC.No.37/SCRC/26.03.001/2013-2014 dated March 19, 2014, has notified that the Asset Reconstruction Companies (ARCs) shall not acquire financial assets. However, they may participate in auctions of the financial assets of which prices are determined by market forces.

The ARCs shall not acquire financial assets on bilateral basis from the following: -

(i)   a bank or financial institution which sponsors the ARC;

(ii)  a bank or financial institution which is either lends to ARC or is a subscriber to the fund raised by the ARC for its operations;

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

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

 


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