SC: Public Premises Act Prevails over State Rent Laws For Evicting Unauthorised Occupants  ||  SC: Doctors Were Unwavering Heroes in COVID-19, and Their Sacrifice Remains Indelible  ||  SC Sets Up Secondary Medical Board to Assess Passive Euthanasia Plea of Man in Vegetative State  ||  NCLAT: Amounts Listed As ‘Other Advances’ in Company’s Balance Sheet aren’t Financial Debt under IBC  ||  NCLT Ahmedabad: Objections to Coc Cannot Bar RP From Challenging Preferential Transactions  ||  J&K&L HC: Courts Should Exercise Caution When Granting Interim Relief in Public Infrastructure Cases  ||  Bombay HC: SARFAESI Sale Invalid if Sale Certificate is Not Issued Prior to IBC Moratorium  ||  Supreme Court: Police May Freeze Bank Accounts under S.102 CrPC in Prevention of Corruption Cases  ||  SC: Arbitrator’s Mandate Ends on Time Expiry; Substituted Arbitrator Must Continue After Extension  ||  SC: Woman May Move Her Department’s ICC For Harassment by Employee of Another Workplace    

RBI issues Fair Practices Code for Asset Reconstruction Companies - (16 Jul 2020)

Banking

Asset Reconstruction Companies (ARCs) registered with the Bank are advised to adopt ‘Fair Practices Code’ (FPC) so as to ensure transparency and fairness in their operation. As per FPC, ARCs must follow transparent and non-discriminatory practices in acquisition of assets and need to maintain arm’s length distance in the pursuit of transparency. ARCs shall put in place Board approved policy on the management fee, expenses and incentives claimed from trusts under their management. The Board approved policy should be transparent and ensure that management fee is reasonable and proportionate to financial transactions. In the matter of recovery of loans, ARCs shall not resort to harassment of the debtor. ARCs shall ensure that, the staff is adequately trained to deal with customers in an appropriate manner.

Further, in order to enhance transparency in the process of sale of secured assets, invitation for participation in auction shall be publicly solicited; the process should enable participation of as many prospective buyers as possible. Terms and conditions of such sale may be decided in wider consultation with investors in the security receipts as per Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002). ARCs intending to outsource any of their activity shall put in place a comprehensive outsourcing policy, approved by the Board.

ARCs should constitute Grievance Redressal machinery within the organisation. The name and contact number of designated grievance redressal officer of the ARC should be mentioned in the communication with the borrowers. The designated officer should ensure that genuine grievances are redressed promptly. ARCs' Grievance Redressal machinery will also deal with the issue relating to services provided by the outsourced agency and recovery agents. FPC is issued by RBI in exercise of the powers conferred by Section 9 of the SARFAESI Act, 2002.

Tags : FAIR PRACTICES CODE   ISSUANCE   ARCS  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved