The Reserve Bank of India today directed Securitisation Companies and Reconstruction Companies that their minimum Owned Fund shall be not less than fifteen percent of the total financial assets acquired or to be acquired by the Securitisation Company or Reconstruction Company on an aggregate basis, or Rs. 100 crore, whichever is less. It has been clarified that the minimum Owned Fund has to be maintained irrespective of whether the assets are transferred to a trust set up for the purpose of securitisation or not, and until realisation of assets and redemption of security receipts issued against such assets.

These directions are applicable to the existing Securitisation Companies and Reconstruction Companies also. The existing companies have been given 3 months’ time to attain the level of revised requirements of Owned Fund.

The relative notification and the circular are available under Notifications at RBI Web-site at www.rbi.org.in

Ajit Prasad
Manager

Press Release: 2003-04/1153