Indian Polity · Polity
Under the SARFAESI Act, 2002, which of the following statements is legally accurate regarding the acquisition of financial assets of a bank by an Asset Reconstruction Company (ARC)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank selling the asset is prohibited from investing in the security receipts issued by the Asset Reconstruction Company for that specific pool of assets.
- 2Every Securitisation Company is required to maintain a capital adequacy ratio of not less than fifteen percent of the total risk-weighted assets of the company.
- 3The consideration for the acquisition of assets can be paid by the issuance of security receipts or debentures or any other security as per the terms agreed between the parties.✓
- 4The ARC must pay at least ninety percent of the acquisition consideration in cash.
Correct answer
The consideration for the acquisition of assets can be paid by the issuance of security receipts or debentures or any other security as per the terms agreed between the parties.
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