What changed
RBI issued a Master Circular updating all prior instructions for SCs/RCs up to June 30, 2009, consolidating them into one document. The circular reaffirms existing requirements: minimum owned fund of 15% of total financial assets acquired or to be acquired or ₹100 crore (whichever lower), business commencement within 6 months of registration (extendable up to 12 months), and quarterly submission of SCRC1 & SCRC2 statements within 15 days of quarter-end.
What it means for you
Banks and lenders dealing with SCs/RCs must ensure these entities maintain adequate capital buffers (15% owned fund) to align their interests with investors. The consolidated circular simplifies compliance by centralizing all rules, but strict deadlines for business commencement and reporting remain. Non-compliance could delay asset reconstruction or securitization deals.
What you must do
- Verify that SCs/RCs you work with maintain minimum owned fund of 15% of total financial assets acquired or to be acquired or ₹100 crore, whichever is lower.
- Ensure SCs/RCs submit quarterly SCRC1 and SCRC2 statements within 15 days of quarter-end.
- Confirm that SCs/RCs commence business within 6 months of registration (or up to 12 months with RBI extension).
- Review the Master Circular for any updated annexures or formats for registration applications.
Who it affects
Securitisation Companies (SCs), Reconstruction Companies (RCs), Banks and financial institutions dealing with SCs/RCs, Investors in security receipts
What is the minimum owned fund requirement for SCs/RCs?
SCs/RCs must maintain owned fund of at least 15% of total financial assets acquired or to be acquired, or ₹100 crore, whichever is lower. This must be held until assets are realized and security receipts redeemed.