SARFAESI Act - Requirement of Net Owned Fund (NOF) for ARCs.

It has been decided to fix the minimum NOF requirement for ARCs at Rs.100 crore on an ongoing basis with effect from the date of the Notification.

NOF shall be arrived at by reducing the following items from owned funds. 

i.           investments of the ARC in shares of –

a.     its subsidiaries;

b.     companies in the same group;

c.      all other ARCs; and

ii.           the book value of debentures, bonds, outstanding loans and advances made to, and deposits with, -

a.     subsidiaries of the ARC; and

b.     companies in the same group,

to the extent such amount exceeds 10% of the OF.

The Minimum NOF of Rs. 100 cr should be achieved by 31^st March 2019.

Based on RBI circular dated 28/04/2017. For any further clarification please visit www.rbi.org.in