Appointment/re-appointment of Director, Managing Director or Chief Executive Officer in Asset Reconstruction Companies

RBI/2023-24/127 DOR.GOV.REC.79/18.10.006/2023-24 February 27, 2024 All Asset Reconstruction Companies Dear Sir / Madam Appointment/re-appointment of Director, Managing Director or Chief Executive Officer in Asset Reconstruction Companies In terms of Section 3(6) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the guidelines contained in Para 5(i) of the Annex to our circular No. DoR.SIG.FIN.REC.75/26.03.001/2022-23 dated October 11, 2022 on ‘Review of Regulatory Framework for Asset Reconstruction Companies (ARCs)’, ARCs are required to obtain prior approval of the Reserve Bank for appointment/re-appointment of any Director, Managing Director or Chief Executive Officer. 2. In order to have uniformity in the information submitted by ARCs for obtaining such approvals, a form for furnishing the requisite information about the candidate and an indicative list of documents required to be submitted along with the application are enclosed as Annex I and Annex II, respectively. ARCs are advised to submit applications, complete in all respect, along with duly signed Annex I and the documents/information mentioned in Annex II to this Department1 at least ninety days before the vacancy arises / the proposed date of appointment or re-appointment. Reserve Bank may call for additional information/documents for processing the application, if required. 3. These instructions shall come into force with immediate effect. Yours faithfully (Scenta Joy) Chief General Manager 1 At the address / email ID mentioned below. िविनयमन िवभाग, क�द्रीय काया�लय , क�द्रीय काया�लय भवन, 12/13वी ंमंिज़ल, शहीद भगत िसंह माग�, फोट�, मुंबई - 400001 फोन : (022)22661602, 22601000 ईमेल: govcbnbfcdor@rbi.org.in Department of Regulation, Central Office, Central Office Building, 12/13th floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400001 Tel :22661602 / 22601000 Email: govcbnbfcdor@rbi.org.in िहंदी आसान ह�, इसका प्रयोग बढ़ाइयेAnnex I Name of ARC: INFORMATION ABOUT THE DIRECTOR / MANAGING DIRECTOR / CHIEF EXECUTIVE OFFICER Sr. Particulars Information/details No. 1. Name of the candidate (proposed appointee) 2. Proposed designation / Type of directorship [Such as Whole-time Director / Managing Director / Chief Executive Officer / Non-executive Director (sponsor/non-sponsor), Independent Director, Nominee Director, etc. (to be clearly specified)] 3. Nationality & Passport No. 4. Date of Birth (DD/MM/YYYY) 5. Address, e-mail ID and phone/mobile number 6. Permanent Account Number (PAN) PAN: Details of income tax returns filed during the Date of filing Amount of tax paid (₹) last 3 years 7. Director Identification Number (DIN) and current status thereof 8. Educational / Professional qualifications 9. Line of Business or Vocation / Profession (A brief write-up detailing the relevant knowledge and professional experience of the candidate) 10. Details of bank accounts of the candidate Bank Type A/c Number across all jurisdictions Name of A/c (Please mention details of all accounts such as savings, current, loans and advances, etc.) 11. Equity shareholding2, if any, of the candidate in the applicant ARC: (i) Number of shares (ii) Face value of shares (iii) Percentage to total paid-up share capital of the ARC 12. Whether the candidate is a nominee of or related/associated with any of the sponsor/s? If yes, details thereof. 13. List of relatives3 of the candidate, who are connected with the ARC (if any), and nature of such connection 2 Please also include details of preference shares, compulsorily convertible debentures, etc., if any, separately. 3 Refer to Section 2(77) of the Companies Act, 2013. 214. Present and past4 occupations (other than those covered at Sr. No. 15) [Designation/Role, Name and address of the organisation, Employee ID, Tenure (from-to), Name of the regulator (if regulated by a financial sector regulator in India or abroad)] 15. Names of banks, financial institutions (including NBFCs/ARCs) and other entities in which the candidate has been chairman / managing director / director / chief executive officer, etc. [Name and address of the organisation and its line of activity, Position held, Tenure (from-to), Name of the regulator (if regulated by a financial sector regulator in India or abroad)] 16. List of entities in which the candidate is considered as interested5 or holding substantial interest6 and its regulator 17. Whether the candidate or the entities listed at (15) and (16) above are or have in the past been in default7 in respect of any credit facilities (fund/non-fund-based) obtained from banks / financial institutions [If yes, please furnish full details such as name of the lender (including the branch name), type of facility, period and quantum of default, etc. and present status thereof] 18. Whether the person is a member of any professional association / body. If yes, details of disciplinary action against him / her, if any, commenced, pending or resulting in conviction in the past, or whether he/she has been banned from any profession/occupation at any time. 19. Details of civil or criminal prosecution (including under Section 138 (1) of the Negotiable Instruments Act, 1881), if any, against the candidate and/or against any of the entities listed in (15) and (16) above initiated, pending or resulting in conviction in the past for violation of economic laws/ regulations. 20. If the candidate has indulged in any breach of AML/CFT guidelines at any time, details thereof. 4 At least during the last 10 years 5 Refer to Section 184 of the Companies Act, 2013. 6 Substantial interest means the beneficial interest held by an individual or his/her spouse or minor child, whether singly or taken together, in the shares of a company/ capital of a firm, the aggregate amount paid-up on which exceeds ten percent of the paid-up share capital of the company or total capital subscribed by all the partners of a partnership firm. 7 ‘Default’ means that the concerned facility has/had been classified as a non-performing asset by the bank/FI. 321. Whether the candidate attracts any of the disqualification envisaged under the Section 164 of the Companies Act, 2013? If yes, please give details thereof. 22. (a) If convicted by a criminal court of an offence involving moral turpitude, details thereof. (b) If convicted by any other court of law, details thereof along with outcome of such proceedings. 23. If the candidate or any of the entities listed at (15) and (16) above has been subject to any investigation or vigilance/disciplinary enquiry by any of the previous employers or government departments or agencies, details thereof along with outcome of such proceedings. 24. If the candidate or the entities listed at (15) and (16) above have at any time been found guilty of violation of rules / legislative requirements by customs / excise / income tax / foreign exchange / other revenue authorities / investigative agencies (including issuance of show cause notice), details thereof. 25. If reprimanded, censured, restricted, suspended, barred, enjoined, or otherwise sanctioned by any regulator such as RBI, SEBI, IRDAI, PFRDA, MCA, professional organisations, government agencies or court because of professional conduct or activities, the details thereof8. 26. If the candidate is a professional (such as a chartered accountant, an advocate, etc.) and is undertaking or has undertaken professional work in any ARC, please provide the details (including the name of the ARC and the period of association) 27. Whether the candidate has been declared a wilful defaulter at any time in the last five years by any bank. If yes, details and present status thereof. 28. Whether the number of directorship held by the candidate exceeds the limits prescribed under Section 165 of the Companies Act, 2013/SEBI’s (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as applicable). 8 Though it shall not be necessary for a candidate to mention herein about the orders and findings which have been later on reversed / set aside in toto, it would be necessary to make a mention of the same in case the reversal / setting aside is on technical reasons like limitation or lack of jurisdiction, and not on merit. If the order is temporarily stayed and the appeal proceedings are pending, the same should also be mentioned. 429. Any other information considered relevant for assessing the person as ‘fit and proper’. Declaration by the proposed appointee 1. I confirm that I am not associated with any unincorporated body which is accepting public deposits. 2. I confirm that I am not associated with any company, the application for Certificate of Registration (CoR) of which has been rejected by the Reserve Bank of India, National Housing Bank or any other financial sector regulator. Undertaking by the proposed appointee 1. I confirm that the above information is, to the best of my knowledge and belief, true and complete. 2. I undertake to keep the Company fully informed, as soon as possible, of all events which take place after submission of this application or after my appointment, which are relevant to the information provided herein above. 3. I also undertake to execute a ‘Deed of Covenant’ with the Company. Place: Date: Signature of the proposed appointee Submission of Nomination and Remuneration Committee (NRC) Confirmation that necessary due diligence in respect of the proposed appointee has been carried out by the NRC. Remarks of the NRC about having satisfied itself that the information provided herein is true and complete. Place: Date: Signature of Chair of the NRC Name: Duly filled in form must be signed by the candidate (proposed appointee) and countersigned by the chairperson of the Nomination and Remuneration Committee of the ARC. 5Annex II An indicative list of documents / information to be furnished along with the application Sr Requirements to be complied with and documents to be submitted Page No. to RBI No. i. Covering Letter by the ARC submitting the application for prior approval for appointment / re-appointment of Director, Managing Director or CEO, duly signed by the authorised signatory (with Company’s seal) ii. Identity document of the candidate – PAN Card / Election Card / Driving License / Passport/ Aadhaar Card (any one) iii. Credit Information Report (Score + Full Report) (not older than 6 months) [Explanation for adverse remarks/features, if any, in the report should also be submitted] iv. Banker’s Report for all accounts (both deposit and loan/advance accounts) where the candidate is an account holder (in the bank’s sealed cover) v. Board Resolution proposing the appointment/re-appointment of the director/MD/CEO, including the proposed tenure vi. Declaration on the status of supervisory compliances by the ARC vii. a) Confirmation whether there has been any change in the shareholding pattern which has led to the proposed appointment (b) Shareholding pattern of the ARC. viii. Composition of the Board before appointment of the proposed director (with designation, date of appointment, tenure, DIN, etc) ix. Confirmation whether SEBI’s LODR guidelines are applicable to the ARC or not? 6