RBI has published a circular allowing Asset Reconstruction Companies ('ARCs') to acquire financial assets from other ARCs. RBI, citing the changes made to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, permitted the above, subject to the following conditions: (i) the transaction is settled on cash basis; (ii) price discovery for such transaction will not be prejudicial to the interest of security receipt holders; (iii) the selling ARC will utilize the proceeds so received for the redemption of underlying security receipts; and (iv) the date of redemption of underlying security receipts and total period of realisation will not extend beyond eight years from the date of acquisition of the financial asset by the first ARC.
Published In: Inter Alia - Quarterly Edition - September 2019 [ English
Date: September 30, 2019
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