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Thursday, April 22, 2010

Securitisation Company u/ SARFAESI Act shall hold atleast 5% of Security Receipts issued by it on ongoing basis till the redemption of scheme, RBI

RBI amendment in SARFAESI provisions

Securitisation Companies/ Reconstruction Companies(SC/RCs) registered with the Bank are required to invest in the Security Receipts (SRs) issued by the trust set up for the purpose of securitisation, an amount not less than 5% under each scheme.

In Paragraph 5 of the The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003, after subparagraph (v), the following subparagraph (vi) shall be inserted.
" (vi) the Securitisation Company or Reconstruction Company shall continue to hold a minimum of 5% of the Security Receipts of each class issued by the SC/RC under each scheme on an ongoing basis till the redemption of all the Security Receipts issued under such scheme.

 

Source: RBI/2009-2010/414 DNBS (PD) CC. No. 19 / SCRC / 26.03.001/ 2009-2010 dated 21st April 2010

1 comments:

Anonymous said...

1) Whether the Securitisation Companies/ Reconstruction Companies are covered under the definition of “Credit Institution” under section 2(f) of the CICRA Act 2005.

2) Whether the Securitisation Companies/ Reconstruction Companies are covered under the definition of “Non Banking Financial Company” under clause (f) of Section 45-I of the Reserve Bank of India Act, 1934.

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