The Parliament of India enacted and passed the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (the Act) to regulate securitisation and reconstruction of financial assets and enforcement of Security Interest (as defined in the Act) and for matters connected therewith. The Act provides for setting up of Securitisation Company/ Reconstruction Company (SC/RC). The Act enables the banks and financial institutions to realize long term Assets, manage problems of liquidity, asset liability mismatch and improve recovery by exercising powers to take possession of security, sell them and reduce Non Performing Assets (NPAs) by adopting measures for recovery or reconstruction within the framework of the Act, the rules framed there under and the guidelines and notifications issued pursuant thereto, by the Reserve Bank of India (RBI). The SC/RCs acquires NPAs from banks, financial institutions and housing finance companies by raising funds from Qualified Institutional Buyers (as defined in the Act) by issue of Security Receipts (as defined in the Act) representing undivided interest in such financial assets. Like banks , financial institution and housing finance companies, the Act also enables SC/ RC to take possession of secured assets of the borrowers including right to transfer and realize the secured assets. SC/RCs act as debt aggregators and are focused in the resolution of NPAs. Thus SC/RCs take away the distraction of banks by isolating NPAs from the banking system. This leaves rest of the banking system free to act in their core area of lending and normal banking business. A SC/RC can commence or carry on business of SC/RC only upon obtaining certificate of registration under SARFAESI. RBI issues various circulars, guidelines and notifications pertaining to SC/RCs from time to time. The notifications, guidelines and circulars may be viewed in www.rbi.org.in.
CIN - U65999MH2002PLC134884              Site Best Viewed in IE 7 and above | Optimum Resolution 1024 x 768