RBI Updates: AIFs now can be "qualified buyers" under SARFAESI Act

Reserve Bank of India (RBI) allowed Category II and Category III Alternative Investment Funds (AIFs) who are registered with SEBI to act as "Qualified Buyers" under SARFAESI Act.

By issuing a notification dated 05th July, 2018, RBI has allowed AIFs registered with SEBI to act as "Qualified buyers" under clause (u) of sub-section (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. However, they should follow comply with following conditions:

1. The AIF which has invested in an asset reconstruction company (ARC) shall not invest in the security receipts issued by that ARC.

2. The AIF shall not invest in the security receipts issued on the underlying loans of any of its associate or group company.

3. The AIF shall not invest in the security receipts backed by non-performing assets of banks which hold equity of more than 10% in that AIF

Copy of such notification can be accessed below.

RBI Updates: RBI tightens remittance norms

RBI, by issuing Circular RBI/2017-18/204 A.P. (DIR Series) Circular No. 32 on 19th June, 2018, tightens the remittance norms under Liberalized Remittance Scheme.

The RBI has tightened norms for Liberalised Remittance Scheme (LRS) by making quoting of permanent account number (PAN) mandatory even for transactions below USD 25,000.

Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.

Individuals can avail of foreign exchange facility for the purposes within the limit of USD 2,50,000 only.

Further, in the context of remittances allowed under LRS for maintenance of close relatives, it has been decided, in consultation with government, to align the definition of 'relative' with the definition given in Companies Act, 2013 instead of Companies Act, 1956, it added.

Copy of such Circular can be accessed below.