What changed
This is a consolidated version of the original 2003 guidelines, updated to include all amendments up to June 30, 2012. No new policy changes were introduced; the circular merely republishes existing instructions in one place for ease of reference.
What it means for you
Banks and lenders dealing with SCs/RCs now have a single, updated reference document for compliance. The 180-day NPA classification rule remains critical for asset quality assessment. Trust structures are exempt from several prudential norms, which may affect how banks structure asset transfers.
What you must do
- Review your existing agreements with SCs/RCs to ensure alignment with the consolidated guidelines.
- Update internal NPA tracking systems to reflect the 180-day overdue criterion from date of acquisition or contract due date.
- Verify that SCs/RCs you transact with are registered under Section 3 of the SARFAESI Act, 2002.
- Assess whether any trust structures you use qualify for the exemptions listed in paragraph 2.
Who it affects
Securitisation Companies (SCs), Reconstruction Companies (RCs), Banks and financial institutions that transfer assets to SCs/RCs, Investors in security receipts issued by SCs/RCs
What is the NPA classification rule for SCs/RCs under these guidelines?
An asset is classified as NPA if interest or principal is overdue for 180 days or more from the date of acquisition or the contract due date, whichever is later.
Are trusts managed by SCs/RCs subject to all the guidelines?
No. Trusts mentioned in paragraph 8 are exempt from several provisions, including those on registration, prudential norms, and certain reporting requirements.
Does this circular introduce any new requirements?
No. It is a consolidation of the 2003 guidelines as amended up to June 30, 2012. No new policy changes were made.