Mumbai: The Reserve Bank of India (RBI) on December 18 issued draft guidelines for securitisation and asset reconstruction companies to facilitate restructuring and realisation of impaired assets.

The apex bank is empowered to prescribe appropriate prudential norms relating to income recognition, accounting standards, capital adequacy and deployment of funds for such companies, under the Securitisation Ordinance 2002, which has been passed by both Houses of Parliament and awaiting Presidential assent, it said in a statement.

The RBI was also empowered to frame guidelines for such companies to take necessary measures for asset reconstruction, including management and rescheduling of debt.

Under the new act, the apex bank would suggest conditions and eligibility criteria with regard to grant of registration certificate to existing as well as new entities for carrying out the business.

It can also direct either generally or to a particular class of entities or to an entity regarding deployment of funds, acquisition of any type of financial assets, their valuation and aggregate value of financial asset that can be acquired, the statement added.

Based on the recommendations of RBI constituted groups for working of securitisation/reconstruction of companies, the apex bank has invited comments from banks, financial institutions and general public on the securitisation/reconstruction companies (Reserve Bank) and prudential norms 2002 and general guidelines for securitisation/reconstruction companies.

PTI