RBI allows CRAs to acquire financial assets from other CRAs – Finance and Banking

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India: RBI allows CRAs to acquire financial assets from other CRAs

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RBI issued a circular authorizing Asset Reconstruction Companies (‘BOW’) to acquire financial assets from other CRAs. RBI, citing the Amendments to the Securitization and Reconstruction of Financial Assets Act 2002 and the Enforcement of the Securities Interests Act, has authorized the foregoing, subject to the following conditions: (i) the transaction is settled in cash; (ii) the discovery of the price of such a transaction will not be prejudicial to the interests of holders of securities receipts; (iii) the selling CRA will use the proceeds so received for the reimbursement of underlying securities receipts; and (iv) the date of repayment of the underlying securities received and the total realization period will not extend beyond eight years from the date of acquisition of the financial asset by the first ARC.

Posted in: Inter Alia – Quarterly Edition – September 2019[English[English[Anglais[English

Dated: September 30, 2019

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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