Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: articles on VAT and GST in India :: cpt :: form 3cd :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: VAT RATES :: list of goods taxed at 4% :: empanelment
 
 
Latest Circulars »
 RBI-Investment under PIS in M/s Laurus Labs Limited by FIIs/FPIs upto 49 per cent and NRIs upto 24 per cent
 RBI-Issuance of 35 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 RBI-Information from Unauthenticated Sources – Advisory to banks
 RBI-Aadhaar-based Authentication for Card Present Transactions
 RBI-External Commercial Borrowings (ECB)
 Issuance of 28 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on November 30, 2016)
 All You wanted to know from RBI about: Withdrawal of Legal Tender Status of ₹ 500 and ₹ 1000 Notes
 Deposit of Specified Bank Notes (SBNs) – Chest Balance Limit / Cash Holding Limit
 Withdrawal of Legal Tender status of banknotes of ₹ 500 and ₹ 1000: Activity at Banks during November 10-27, 2016
 Reserve Bank of India Act, 1934 – Section 42(1A) Requirement for maintaining additional CRR

Guidelines on Sale of Financial Assets to Securitisation Company (SC)/Reconstruction Company (RC) and Related Issues
June, 12th 2015

RBI/2014-15/634
DBR.No.FID.5/01.02.00/2014-15

June 11, 2015

All-India Term Lending and Refinancing Institutions
(Exim Bank, NABARD, NHB and SIDBI)

Dear Sir,

Guidelines on Sale of Financial Assets to Securitisation Company (SC)/Reconstruction Company (RC) and Related Issues

Please refer to paragraph 3.4 of circular DBOD.BP.BC.No.98/21.04.132/2013-14 dated February 26, 2014 and our subsequent mailbox clarification dated April 9, 2014 on the captioned subject. These guidelines stipulated that, for non-performing assets (NPAs) sold on or after February 26, 2014 to SCs/RCs, banks can reverse the excess provision on sale of NPAs, if the sale value is for a value higher than the net book value (NBV).

2. In this connection, attention is invited to paragraph 28 (extract enclosed) of the Sixth Bi-Monthly Monetary Policy Statement, 2014-15 announced on February 03, 2015. As indicated therein, it has now been decided to permit All-India Term Lending and Refinancing Institutions(AIFIs) to reverse the excess provision (when the sale is for a value higher than the NBV) on sale of NPAs (sold prior to February 26, 2014 to SCs/RCs) to their profit and loss account. We re-iterate that All India Financial Institutions can reverse excess provision arising out of sale of NPAs only when the cash received (by way of initial consideration and/or redemption of security receipts/pass through certificates) is higher than the NBV of the NPAs sold to SCs/RCs. Further, the quantum of excess provision reversed to profit and loss account will be limited to the extent to which cash received exceeds the NBV of the NPAs sold.

3. The quantum of excess provision reversed to the profit and loss account on account of sale of NPAs shall be disclosed in the financial statements of the bank under ‘Notes to Accounts’.

4. To enhance transparency, it has been decided that in addition to the disclosure requirements quoted in the above paragraph, All India Financial Institutions shall make the following disclosures in the Notes to Accounts in their Annual Financial Statements:

(In Rs. Crore)
Particulars Backed by NPAs sold by the AIFI as underlying Backed by NPAs sold by banks / other financial institutions / non-banking financial companies as underlying Total
Previous Year Current Year Previous Year Current Year Previous Year Current Year
Book value of investments in security receipts            

Yours faithfully,

(Rajinder Kumar)
Chief General Manager

Encl: as above


Extracts from Sixth Bi-monthly monetary policy Statement, 2014-15

28. Under the Framework for Revitalising Distressed Assets in the economy, banks were allowed in February 2014 to reverse the excess provision on sale of non-performing assets (NPAs) to securitisation companies/reconstruction companies when the cash received (by way of initial sale consideration and/or redemption of security receipts/pass-through certificates) is higher than the net book value (NBV) of the asset, with a view to incentivising banks to recover appropriate value in respect of their NPAs, subject to certain conditions. This dispensation was, however, available on a prospective basis, i.e., only with regard to NPAs sold on or after February 26, 2014. On a review and based on banks’ representations in this regard, it has now been decided to extend the above dispensation to NPAs sold prior to February 26, 2014 also. Detailed guidelines to this effect will be issued shortly.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions