Section 10: Other functions of asset reconstruction company

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Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)

CHAPTER-II

Regulation of securitisation and Reconstruction of Financial Assets of Banks and Financial Institutions

Section 10: Other functions of 1[asset reconstruction company]

10. (1) Any 1[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 1[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 1[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 1[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, “1[asset reconstruction company]” or “1[asset reconstruction company]” does not include its subsidiary.


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Amendments:

1. Substituted by Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, w.e.f. 1-9-2016 through sec. 3 as under:

“3. Throughout the principal Act,—
(i) for the words “securitisation company”, “reconstruction company”, “securitisation or reconstruction company” , “securitisation company or the reconstruction company” or “securitisation company or a reconstruction company”, wherever they occur, the words “asset reconstruction company” shall be substituted;

(ii) for the words “securitisation companies or reconstruction companies”, wherever they occur, the words “asset reconstruction companies” shall be substituted;

(iii) for the words “qualified institutional buyer”, wherever they occur, the words “qualified buyer” shall be substituted;

(iv) for the words “qualified institutional buyers”, wherever they occur, the words “qualified buyers” shall be substituted.”

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