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Sec 10, SARFAESI Act 2002: Other Functions Asset Reconstruction Co.

Section 10 (Other functions of asset reconstruction company) under Chapter II (Regulation of securitisation and reconstruction of financial assets of banks and financial institutions) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 —

(1) Any asset reconstruction company registered under section 3 may—

 (a) act as an agent for any bank or financial institution for the purpose of recovering their dues from the borrower on payment of such fees or charges as may be mutually agreed upon between the parties;

 (b) act as a manager referred to in clause (c) of sub-section (4) of section 13 on such fee as may be mutually agreed upon between the parties;

 (c) act as receiver if appointed by any court or tribunal:

 Provided that no asset reconstruction company shall act as a manager if acting as such gives rise to any pecuniary liability.

(2) Save as otherwise provided in sub-section (1), no asset reconstruction company which has been granted a certificate of registration under sub-section (4) of section 3, shall commence or carry on, without prior approval of the Reserve Bank, any business other than that of securitisation or asset reconstruction:

 Provided that a asset reconstruction company which is carrying on, on or before the commencement of this Act, any business other than the business of securitisation or asset reconstruction or business referred to in sub-section (1), shall cease to carry on any such business within one year from the date of commencement of this Act.

Explanation.—For the purposes of this section, "asset reconstruction company" or "asset reconstruction company" does not include its subsidiary.

Extra Notes for Readers

(1) Section 10 of SARFAESI Act, 2002 was modified by the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (Act 44 of 2016), sec. 3, (w.e.f. 1-Sep-2016).

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