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 12: Power of Reserve Bank to determine policy and issue directions.
12. (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 1[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 1[asset reconstruction company], it is necessary or expedient so to do, it may determine the policy and give directions to all or any 1[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 1[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 1[asset reconstruction company] generally or to a class of 1[asset reconstruction companies] or to any 1[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 1[asset reconstruction company].
2[(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.]
Reference
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.”
2. Inserted by Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, (w.e.f. 01.09.2016 vide N. No. S.O. 2831(E) dated 01.09.2016).
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