Permission to acquire financial asset from other Asset Reconstruction Companies (ARCs)

**Policy Summary:** This circular, reference number RBIDNBR201819227 DNBR.PD ARC CC.No.0726.03.001201819, dated June 28, 2019, issued by the Reserve Bank of India (RBI), addresses the acquisition of financial assets by Asset Reconstruction Companies (ARCs) from other ARCs. It refers to Circular DNBS.PD.CC.No.35/SCRC/26.03.001/2013-2014 dated January 23, 2014, on the same subject. In light of amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, the RBI now permits ARCs to acquire financial assets from other ARCs, subject to the following conditions: * The transaction must be settled on a cash basis. * Price discovery must not be prejudicial to the interests of Security Receipt holders. * The selling ARC is required to utilize the proceeds from the sale for the redemption of underlying Security Receipts. * The date of redemption of underlying Security Receipts and the total period of realisation must not extend beyond eight years from the date of the initial acquisition of the financial asset by the first ARC. The circular is addressed to the Chairman/Managing Director/Chief Executive Officer of all registered Asset Reconstruction Companies. Contact information: Manoranjan Mishra, Chief General Manager.

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