Asset Reconstruction Company Registration

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What is an Asset Reconstruction Company?

Under the Companies Act, 2013, Asset Reconstruction Company is a specialised financial institution engaged in purchasing bad loans, NPAs from banks, and financial institutions to clean their balance sheet. Moreover, it acts as a bank recovery agent as it takes over the loans and advances from the bank and financial institutions for recovery.

This company has been set up with an objective of securitization, and it also needs registration from RBI. Also, it is regulated by Section 3 of the SARFAESI Act, 2002.

Additionally, for the acquisition of financial assets, the scrutinization or reconstruction company becomes the financial asset owner and acts as a lender bank/FIs.

Is Asset Reconstruction Company registration mandatory?

As per notification No.DNBS.1/CGM(CSM)-2003 (dated March 7th, 2003), every Scrutinization and Asset Reconstruction Company must apply for the registration and obtain the registration certificate from the bank according to Section 3 of the Act.

What is the mission of Asset Reconstruction Company?

The objective of an asset reconstruction company is to pursue the common interest, i.e., ensure efficacious management, reforming the scrutinization business, and asset reconstruction. Hence, creating stakeholder value.

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Permissible Business Activities Under Asset Reconstruction Company

Establishments registered as Asset Reconstruction Company have the authority to commence or undertake securitization and asset reconstruction activities.

If an establishment engages in activities other than prescribed, the registration of the company shall cancel.

An establishment should not engage in raising the deposit of monies (plural form of money).

Prerequisite to Fulfill Before an Asset Reconstruction Company Registration

In the previous three years, the company should not incur a loss.

An Asset Reconstruction Company must pay the periodic returns and redeem on particular due dates on which the investment is made by qualified buyers or other individuals in the company.

The company’s directors should possess the required experience regarding finance, financial management, scrutinization, and reconstruction business.

The company should comply with or be ready and obey the Reserve Bank of India (RBI).

The company sponsors should be appropriate and proper as prescribed by the Reserve Bank of India (RBI).

Each director should be free from any offense involving moral depravity.

An appropriate arrangement to realize the acquired financial assets.

Documents Required For Asset Reconstruction Company Registration With RBI

An appropriate arrangement to release the acquired financial assets.

If any, submit the information regarding Scrutinization or Asset Reconstruction Company activities in the previous three years or since the company’s commencement, whichever is less.

Particulars of sponsors, shareholders, and a short description of directors’ profiles along with their qualifications and experience.

Information concerning terms of payment of interest/principal, redemption/date of maturity.

Information on the geographical distribution of the pool of assets, including residual maturity, interest rates, and outstanding principal of same.

Details of policy acquisition of assets and valuation methodology used.

If any, submit the details of arrangements regarding the implementation of asset reconstruction measures (in case of default).

Submit the statement of risk factors, specifically related to future cash flows.

Details on duties of Trustee.

Submit the information regarding interest rate or probe yield.

The arrangement made for asset management and the extent of the management fee charged by the company.

You are required to describe the instrument giving particulars regarding its form, issue price, denomination, etc., along with the affirmation that transferability of security receipt is limited to the qualified institutional buyers.

You are required to submit the brief financial information of the previous three years since the company’s commencement, whichever is less.

If any, submit the information of credit rating and brief on the rationale for the rating.

Information regarding nature and underlying security quantum and timing, except cash flow and credit improvement measures.

Details of terms of asset acquisition from the banks or financial institutions.

If any, submit the information concerning terms of replacement of assets in the pool of assets.

If any, submit the details of particular asset reconstruction measures.

Submit the objects of the offer.

Explanation of assets being scrutinized.

Asset Reconstruction Company Registration Process

An application form needs to be filled as prescribed by the Act.

When filling the application form, all the required documents will be affixed.

After the submission of the appliction, the Reserve Bank of India (RBI) will examine the records, assets, and books of the reconstruction company to ensure whether all the conditions are fulfilled or not.

The certificate from the RBI will be obtained if an Asset Reconstruction Company satisfies the standards laid by RBI.

Note- RBI also holds the authority to reject the application if the company fails to withstand the prescribed standards.

JR Compliance consists of a team of experts who understands your business and provides you with the most satisfactory solution to your query regarding Asset Reconstruction Company registration. Not only this, but we will assist you throughout the Asset Reconstruction Company registration with RBI because we care about our clients, that’s why we comprise all the resources and experts to provide 100% assistance.

Our Role in Asset Reconstruction Company Registration

We will assist you in the process of Asset Reconstruction Company Registration from the first to last step of registration.

Our Asset Reconstruction Company consultants will assist you in documentation to ensure the submission of required documents as and when needed.

We are equipped with the necessary resources to track your application.

We guarantee to provide you with complete assistance in the examination of the company by RBI.

We will directly coordinate with RBI officials to ensure proper follow-ups.

To meet your expectations we invest our efforts in completing all the required formalities.

Our Asset Reconstruction consultants will provide you with an appropriate solution to your concerns.

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Conclusion

An Asset Reconstruction Company registration with RBI is essential before commencing its activities. However, the registration process of an asset reconstruction company could be tedious. Thus, to register an Asset Reconstruction Company, you required experienced personnel.

Consequently, JR Compliance comprises the experience, professionalism, and knowledgeable consultants who guarantee to provide you most satisfactory assistance throughout the process of Asset Reconstruction Company registration with RBI. Moreover, you can blindly follow our advice as we offer the finest advice after proper evaluation and research.

Hence, for expert and professional services, contact us immediately.

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Asset Reconstruction Company Registration

What is an Asset Reconstruction Company?

Is Asset Reconstruction Company registration mandatory?

What is the mission of Asset Reconstruction Company?

Get Free Expert Consultation!

Permissible Business Activities Under Asset Reconstruction Company

Prerequisite to Fulfill Before an Asset Reconstruction Company Registration

Documents Required For Asset Reconstruction Company Registration With RBI

Asset Reconstruction Company Registration Process

Our Role in Asset Reconstruction Company Registration

Conclusion

Get Your Free Consultation!

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Asset Reconstruction Company Registration

What is an Asset Reconstruction Company?

Is Asset Reconstruction Company registration mandatory?

What is the mission of Asset Reconstruction Company?

Get Free Expert Consultation!

Permissible Business Activities Under Asset Reconstruction Company

Prerequisite to Fulfill Before an Asset Reconstruction Company Registration

Documents Required For Asset Reconstruction Company Registration With RBI

Asset Reconstruction Company Registration Process

Our Role in Asset Reconstruction Company Registration

Conclusion

Get Your Free Consultation!

Mother Promise we won't spam you.

Our professionals are just a click away !

Get All Compliance Services under One Roof

Trusted By :