Registration of Securitisation Company Or Reconstruction Company
- can commence or carry business if
1. Obtain certification of registration from RBI
2. It has the owned funds not less than 2 Crores
Cancellation of Certificate of Incorporation
1. The company ceases to carry on the business
2. The company ceases to receive or hold any investment from a qualified institutional buyer.
3. The company fails to comply with any of the conditions subject to which the certificate of registration was granted
4. Fails to comply with RBI directions.
5. Fails to maintain accounts in accordance with directions issued by RBI.
6. Fails to give accounts and documents to RBI for inspection.
Asset Reconstruction means acquisition of any right or interest of any bank of financial institution in any financial asset for the purpose of realisation.
Securitisation Company needs registration from RBI for commencement of business.
Right of acquisition of financial asset by Securitisation Company/RC is subject to the prior agreements or contracts about the asset. (False)
Acquisition of financial asset by Securitisation Company/RC is with the liability also over such asset. (False)
The four documents involved in the Securitisation Transaction
Offer Document – Full details of financial asset, loan details of bank etc.
Debenture – A debenture for payment of consideration to be paid to the bank or financial institution for acquisition asset from it.
Agreement – it is with originator to continue to service the assets.
Security Receipt – It is in favour of investors.
Any direction issued by the RBI under SARFAESI Act has Statutory effect and is binding on the parties concerned.
After application of SARFAESI Act existing companies have to get registered within six months from commencement of the Act