law: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
  3. Registration of
  
  securitisation companies or reconstruction companies.- 
  1.     
  
    No
  
  securitisation company or reconstruction company shall commence or carry on the
  
  business of securitisation or asset reconstruction without-
  a.      obtaining a
  
  certificate of registration granted under this section; and
  b.     having the owned fund
  
  of not less than two crore rupees or such other amount not exceeding fifteen
  
  per cent. of total financial assets acquired or to be acquired by the
  
  securitisation company or reconstruction company, as the Reserve Bank may, by
  
  notification, specify:
  Provided that  the Reserve Bank
  
  may, by notification, specify different amounts of owned fund for different
  
  class or classes of securitisation companies or reconstruction companies:
  Provided further  that a
  
  securitisation company or reconstruction company, existing on the commencement
  
  of this Act, shall make an application for registration to the Reserve Bank
  
  before the expiry of six months from such commencement and notwithstanding
  
  anything contained in this sub-section may continue to carry on the business of
  
  securitisation or asset reconstruction until a certificate of registration is
  
  granted to it or, as the case may be, rejection of application for registration
  
  is communicated to it.
  1.     
  
  
  2.     
  
    Every
  
  securitisation company or reconstruction company shall make an application for
  
  registration to the Reserve Bank in such form and manner as it may specify.
  3.     
  
    The
  
  Reserve Bank may, for the purpose of considering the application for
  
  registration of a securitisation company or reconstruction company to commence
  
  or carry on the business of securitisation or asset reconstruction, as the case
  
  may be, require to be satisfied, by an inspection of records or books of such
  
  securitisation company or reconstruction company, or otherwise, that the
  
  following conditions are fulfilled, namely:-
  a.      that the
  
  securitisation company or reconstruction company has not incurred losses in any
  
  of the three preceding financial years;
  b.     that such
  
  securitisation company or reconstruction company has made adequate arrangements
  
  for realisation of the financial assets acquired for the purpose of
  
  securitisation or asset reconstruction and shall be able to pay periodical
  
  returns and redeem on respective due dates on the investments made in the
  
  company by the qualified institutional buyers or other persons;
  c.      that the directors of
  
  securitisation company or reconstruction company have adequate professional
  
  experience in matters related to finance, securitisation and reconstruction;
  d.     that the board of
  
  directors of such securitisation company or reconstruction company does not
  
  consist of more than half of its total number of directors who are either
  
  nominees of any sponsor or associated in any manner with the sponsor or any of
  
  its subsidiaries;
  e.      that any of its directors
  
  has not been convicted of any offence involving moral turpitude;
  f.      that a sponsor, is
  
  not a holding company of the securitisation company or reconstruction company,
  
  as the case may be, or, does not otherwise hold any controlling interest in
  
  such securitisation company or reconstruction company;
  g.     that securitisation
  
  company or reconstruction company has complied with or is in a position to
  
  comply with prudential norms specified by the Reserve Bank.
  1.     
  
  
  2.     
  
  
  3.     
  
  
  4.     
  
    The
  
  Reserve Bank may, after being satisfied that the conditions specified in
  
  sub-section (3) are fulfilled, grant a certificate of registration to the
  
  securitisation company or the reconstruction company to commence or carry on
  
  business of securitisation or asset reconstruction, subject to such conditions,
  
  which it may consider, fit to impose.
  5.     
  
    The
  
  Reserve Bank may reject the application made under sub-section (2) if it is
  
  satisfied that the conditions specified in sub-section (3) are not fulfilled:
  Provided  that  before rejecting the
  
  application, the applicant shall be given a reasonable opportunity of being
  
  heard.
  1.     
  
  
  2.     
  
  
  3.     
  
  
  4.     
  
  
  5.     
  
  
  6.     
  
    Every
  
  securitisation company or reconstruction company, shall obtain prior approval
  
  of the Reserve Bank for any substantial change in its management or change of
  
  location of its registered office or change in its name:
  Provided  that  the decision of the
  
  Reserve Bank, whether the change in management of a securitisation company or a
  
  reconstruction company is a substantial change in its management or not, shall
  
  be final.
  Explanation.-  For the purposes of
  
  this section, the expression substantial change in management means the change
  
  in the management by way of transfer of shares or amalgamation or transfer of
  
  the business of the company.