The Reserve Bank of India (RBI) has allowed asset reconstruction companies (ARCs) to buy financial assets from other such entities. However, all such transactions have to settled in cash, the banking regulator said.

“In view of amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, it has been decided to permit ARCs to acquire financial assets from other ARCs,” the RBI said.

“Price discovery for such transaction shall not be prejudicial to the interest of security receipt holders,” the RBI further said, adding the selling ARC must utilise the proceeds so received for the redemption of underlying security receipts.

The date of redemption of underlying Security Receipts and total period of realisation should not extend beyond eight years from the date of acquisition of the financial asset by the first ARC, RBI said.

You need to subscribe or sign-up to read Today's Paper articles.

Already a subscriber? Sign in

Already a subscriber? Sign in

Find mobile-friendly version of articles from the day's newspaper in one easy-to-read list.

Enjoy reading our articles without intrusion from advertisements.

A select list of articles that match your interests and tastes.

Move smoothly between articles as our pages load instantly.

A one-stop-shop for seeing the latest updates, and managing your preferences.

We brief you on the latest and most important developments, three times a day.

*Our Digital Subscription plans do not include the e-paper. Our plans enhance your online reading experience.

Already a user? Sign In

To know more about Ad free news reading experience and subscription Click Here

or Please whitelist our website on your Adblocker