The Reserve Bank of India (RBI) has issued a notification on Net Owned Fund (NOF) for Asset Reconstruction Companies (ARCs). The notifications amends its prior notification dated April 28, 2017. The present notification was issued on 23rd January, 2023 and comes into immediate effect.
RBI now specifies that the Net Owned Fund (NOF) for Asset Reconstruction Companies (ARCs) shall be minimum Rupees 300 Crore on an ongoing basis with effect from 23rd January, 2023. This sum was previously fixed at Rs. 100 Crore and has now been enhanced to Rs. 300 Crore.
Additionally, all the ARCs, which are already registered with RBI shall achieve the minimum NOF level of Rupees two hundred crores latest by March 31, 2024, and Rupees three hundred crores latest by March 31, 2026.”
The RBI also makes amendments in the Notifications dated May 16, 2018, and dated March 10, 2021.
Through these amendments it removes the restriction on AIFs which have invested in an asset reconstruction company (ARC) from also investing in the security receipts issued by that ARC. This will come into immediate effect from 23rd January, 2023.