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Our Bureau

Mumbai, Dec. 6

The Reserve Bank of India in its Draft Guidelines on change in or takeover of the management of the business of the borrower by Securitisation Companies (SC) or Reconstruction Companies (RC) issued on Friday said SCs/RCs could change or takeover the management of borrower business for the purpose of realisation of dues under SARFAESI Act when the amount due to the them from the borrower is not less than 25 per cent of the total assets owned by the borrower.

Further, the SCs/RCs could also press for a change in or takeover of the management of the business of the borrower where the borrower is financed by more than one secured creditor (including SC/RC), secured creditors (including SC/RC) representing not less than 75 per cent of the total secured debt agree to such action

On realisation of its dues in full or within a period of five years from the date of acquisition of assets or such extension thereof as may be permitted by the RBI, whichever is earlier, the SC/RC will have to restore the management to the borrower as provided in Section 15(4) of the Act.

More Stories on : Securitisation | Non-Performing Assets

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