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Friday, October 5, 2007

New NPA Guidelines & Death before DIN procedure

RBI/2007-2008/152 DBOD.No.BP.BC.34 /21.04.048 /2007-08

October 4, 2007 -> Thanks to DR. KS Ravichandran

Guidelines on purchase/sale of Non Performing Assets

Please refer to our Circular No.DBOD.BP.BC.16 /21.04.048/2005-06 dated 13 July 2005 on the captioned subject.


All Commercial Banks (excluding RRBs)

All India Term Lending and Refinancing Institutions

All Non Banking Financial Companies (including RNBCs)

2. In terms of the above banks' Boards are required to lay down policies and

guidelines covering among other things, valuation procedure to be followed to ensure that the economic value of financial assets is reasonably estimated based on the assessed cash flows arising out of repayments and recovery prospects. However, it has come to notice that in some cases NPAs have been sold for much less than the value of available securities and no justification has been given.

3. Banks should, while selling NPAs, work out the net present value of the estimated cash flows associated with the realisable value of the available securities net of the cost of realisation. The sale price should generally not be lower than the net present value arrived at in the manner described above.

4. Same principle should be used in compromise settlements. As the payment of the compromise amount may be in instalments, the net present value of the settlement amount should be calculated and this amount should generally not be less than the net present value of the realisable value of securities.

Process for filing Form 32 in cases where Director has died and regular DIN is not available

Thanks to CSMysore

This is with regard to filing of form 32 for cessation of directors due to death, who were appointed prior to 1 st July, 2007 and had not obtained approved DIN

1. Please send an email to furnishing following details under heading – 'Form 32 – death case, No DIN'

v Name of the company (in which the individual was a director)

v Name of the deceased Director

v Date of birth

v Date of appointment as Director

v Date of filing of Form 32 for appointment

v Date of death (along with certified copy of death certificate issued by competent authority)

(e.g) e-mail address of the company

2. Upon receipt of email, MCA Helpdesk will check and consider the information submitted and if found satisfactory, MCA Helpdesk will intimate the status/ outcome of the ticket to the stakeholder. If MCA Helpdesk needs additional information from the stakeholder, he will send an email to the Company accordingly.

3. Upon receipt of approval email from MCA, stakeholder will be required to file the form directly with the concerned ROC along with - signed form 32, necessary attachments, and a copy of approval e-mail and proof of payment of filing fee, with the respective ROC office. Filing Fee will be paid through ' Pay Miscellaneous Fee' option on MCA portal.

4. ROC will process / approve the form, scan the physical form 32 along with its attachments and upload the same in the electronic records of the company through 'On Demand Scanning' option.

5. ROC will update the relevant records/ data of the company accordingly.

Trezrrr every pulsss


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