Securities and Exchange Board of India (SEBI) has issued a notification under clause (u) of sub-section (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The notification, dated February 28, 2025, supersedes a previous SEBI notification from March 31, 2008. It specifies that all non-banking financial companies (NBFCs), including housing finance companies regulated by the Reserve Bank of India (RBI), are now classified as qualified buyers under the SARFAESI Act. This designation allows these entities to participate in asset reconstruction processes, subject to certain conditions. First, NBFCs and housing finance companies must ensure that defaulting promoters or their related parties do not directly or indirectly regain access to secured assets through security receipts. Second, these financial institutions must comply with additional conditions that may be specified by the RBI. The move aligns with regulatory efforts to prevent misuse of asset reconstruction mechanisms while enabling a structured approach to resolving stressed assets. The notification has been issued under the authority of SEBI Chairperson Madhabi Puri Buch.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 28th February, 2025
Notification 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
F.No. SEBI/LAD-NRO/GN/2025/232.—In exercise of the powers conferred under clause (u) of subsection (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) and in supersession of the notification of Securities and Exchange Board of India number F. No. 11/LC/GN/2008/21670 dated 31st March, 2008, except as regards things done or omitted to be done before such supersession; all non-banking financial companies including housing finance companies, regulated by the Reserve Bank of India, are hereby specified as qualified buyers for the purposes of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) subject to the following conditions:
a. such non-banking financial companies including housing finance companies shall ensure that the defaulting promoters or their related parties do not directly or indirectly gain access to secured assets through security receipts; and
b. such non-banking financial companies including housing finance companies shall comply with such other conditions as the Reserve Bank of India may specify from time to time.
MADHABI PURI BUCH, CHAIRPERSON
[ADVT.-III/4/Exty./1000/2024-25]
