Paragraph 5.2.17 Asset Reconstruction Companies
- Text as on
- As issued 15 October 2020; Press Notes since are not applied
5.2.17 ASSET RECONSTRUCTION COMPANIES
Sector/Activity % of Equity/ Entry Route FDI Cap Automatic
5.2.17.1‘Asset Reconstruction Company’ (ARC) 100% means a company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act).
5.2.17.2 OTHER CONDITIONS
(i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs) registered with Reserve Bank of India, up to 100% on the automatic route.
(ii) Investment limit of a sponsor in the shareholding of an ARC will be governed by the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time. Similarly, investment by institutional / non-institutional investors will also be governed by the said Act, as amended from time to time.
(iii) The total shareholding of an individual FPI shall be below 10% of the total paid-up capital.
(iv) FPIs can invest in the Security Receipts (SRs) issued by ARCs. /FPIs may be allowed to invest up to 100 per cent of each tranche in SRs issued by ARCs, subject to directions/guidelines of Reserve Bank of India. Such investment should be within the relevant regulatory cap as applicable.
(v) All investments would be subject to provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time.