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ARTICLE · 19 MAY 2016

FDI Liberalisation In The ARC Sector

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In this note, we briefly analyse the changes brought out by Press Note 4 and the impact of the Proposed Amendment in liberalising the regime on foreign investment in ARCs.

IndiaGovernment, Public Sector
Ashwin Bishnoi
Ashwin Bishnoi
Kumar Saurabh Singh
Kumar Saurabh Singh
Siddharth Shah
Siddharth Shah
Tarang Shashishekar
Tarang Shashishekar
Author LinkedIn connections

Background

Close at the heels of the announcement made in the Union Budget in February 2016, the Government released Press Note 4 of 2016 dated 6 May 2016 (Press Note 4) liberalising foreign entry norms in asset reconstruction companies registered with the Reserve Bank of India (RBI) (ARCs) by allowing 100% foreign direct investment (FDI) under the automatic route in ARCs. It has also proposed amendments to bring the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) in sync with the dispensations provided under Press Note 4 by introducing the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016 (Proposed Amendment) in the Lower House of Parliament. In this note, we briefly analyse the changes brought out by Press Note 4 and the impact of the Proposed Amendment in liberalising the regime on foreign investment in ARCs.

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