Calcutta HC: Employee Looking for Another Job with Rival Company Isn’t Contrary  ||  Allahabad HC: Can’t Call Hindu Marriage Invalid Only because it Isn’t Registered  ||  Allahabad HC: Can’t Call Hindu Marriage Invalid Only because it Isn’t Registered  ||  Allahabad HC: No Power on Police to Open History-Sheet on Likes or Dislikes  ||  Rajasthan HC Puts Stay on Installation of Dairy Booth Outside Private Residence  ||  Calcutta HC: Cannot Summon Accused to Produce Incriminating Evidence against Himself  ||  Kerala HC Upholds STA’s decision mandating installation of cameras with Fatigue Detection Censors  ||  SC: Executive Instructions Cannot Override Statutory Recruitment Processes  ||  Delhi Lieutenant Governor’s Notification regarding Evidence of Police officers Put on Hold  ||  SC Issues Notice in Plea to Bring Bar Councils under POSH Act    

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