What changed
RBI issued a Master Circular consolidating all prior circulars/notifications for SCs/RCs updated as of June 30, 2011. Key requirements include: minimum owned fund of 15% of total financial assets acquired or to be acquired on aggregate basis or ₹100 crore (whichever lower), business commencement within 6 months (extendable up to 12 months), quarterly submission of SCRC1 & SCRC2 statements within 15 days of close of quarter, annual audited balance sheet submission within one month of AGM, and investment of at least 5% in security receipts under each scheme.
What it means for you
Banks dealing with SCs/RCs must ensure these entities comply with the consolidated norms, especially the minimum owned fund requirement which ensures skin-in-the-game. The quarterly reporting and audited balance sheet submission enhance transparency and regulatory oversight. Banks should verify that SCs/RCs they transact with meet these standards to avoid regulatory risks.
What you must do
- Verify that SCs/RCs you partner with maintain minimum owned fund of 15% of total financial assets acquired or to be acquired on aggregate basis or ₹100 crore (whichever lower).
- Ensure SCs/RCs submit quarterly statements (SCRC1 & SCRC2) within 15 days of close of quarter.
- Check that SCs/RCs commence business within 6 months of registration (extendable to 12 months).
- Review audited balance sheets of SCs/RCs submitted within one month of their AGM.
- Confirm that SCs/RCs hold the minimum owned fund until asset realization and security receipt redemption.
- Ensure SCs/RCs invest at least 5% in security receipts under each scheme.
Who it affects
Securitisation Companies (SCs), Reconstruction Companies (RCs), Banks dealing with SCs/RCs, RBI's Department of Non-Banking Supervision
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 on aggregate basis or ₹100 crore, whichever is lower. This must be held until asset realization and security receipt redemption.
What is the minimum investment in security receipts?
SCs/RCs must invest at least 5% in security receipts issued by the trust under each scheme.