labels: banks & institutions
Banks, FIs are now allowed to form ARCs news
Our Banking Bureau
25 June 2002
New Delhi: The Indian President has promulgated an ordinance on securitisation and reconstruction of financial assets and enforcement of security interest.

The union cabinet had earlier approved it on 18 June 2002. The ordinance will help banks and financial institutions (FIs) treat their financial assets in three ways.

Firstly, it will help banks and FIs turn their assets into securities, which could be traded in the market in smaller bundles. This would bring immediate liquidity, which can be lent, instead of waiting for loans to be realised.

The new law will also help FIs in setting up asset reconstruction companies to recover their bad assets. And finally, it will help FIs in the enforcement of security interest (the right to the security in case of default by the client).


 

 


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Banks, FIs are now allowed to form ARCs