search this site - type your query and submit

Daily Email Newsletter (Sign-up Free)

Sec 12, SARFAESI Act 2002: RBI Power - Determine Policy & Issue Directions

Section 12 (Power of Reserve Bank to determine policy and issue directions) 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) If the Reserve Bank is satisfied that in the public interest or to regulate financial system of the country to its advantage or to prevent the affairs of any asset reconstruction company from being conducted in a manner detrimental to the interest of investors or in any manner prejudicial to the interest of such asset reconstruction company, it is necessary or expedient so to do, it may determine the policy and give directions to all or any asset reconstruction company in matters relating to income recognition, accounting standards, making provisions for bad and doubtful debts, capital adequacy based on risk weights for assets and also relating to deployment of funds by the asset reconstruction company, as the case may be, and such company shall be bound to follow the policy so determined and the directions so issued.

(2) Without prejudice to the generality of the power vested under sub-section (1), the Reserve Bank may give directions to any asset reconstruction company generally or to a class of asset reconstruction companies or to any asset reconstruction company in particular as to—

 (a) the type of financial asset of a bank or financial institution which can be acquired and procedure for acquisition of such assets and valuation thereof;

 (b) the aggregate value of financial assets which may be acquired by any asset reconstruction company.

 (c) the fee and other charges which may be charged or incurred for management of financial assets acquired by any asset reconstruction company;

 (d) transfer of security receipts issued to qualified buyers.





Extra Notes for Readers

(1) Section 12 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 & 9, (w.e.f. 1-Sep-2016).

No comments:

Post a Comment

In comment with "Name/Url" option, only Name is mandatory to be filled.