4. Cancellation of certificate of registration
The Reserve Bank may cancel a certificate of registration granted to a [asset reconstruction company], if such company—
ceases to carry on the business of securitisation or asset reconstruction; or
ceases to receive or hold any investment from a [qualified buyer]; or
has failed to comply with any conditions subject to which the certificate of registration has been granted to it; or
at any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (3) of section 3; or
fails to—
comply with any direction issued by the Reserve Bank under the provisions of this Act; or
maintain accounts in accordance with the requirements of any law or any direction or order issued by the Reserve Bank under the provisions of this Act; or
submit or offer for inspection its books of account or other relevant documents when so demanded by the Reserve Bank; or
obtain prior approval of the Reserve Bank required under sub-section (6) of section 3:
Provided that before cancelling a certificate of registration on the ground that the [asset reconstruction company] has failed to comply with the provisions of clause (c) or has failed to fulfil any of the conditions referred to in clause (d) or sub-clause (iv) of clause (e), the Reserve Bank, unless it is of the opinion that the delay in cancelling the certificate of registration granted under sub-section (4) of section 3 shall be prejudicial to the public interest or the interests of the investors or the [asset reconstruction company], shall give an opportunity to such company on such terms as the Reserve Bank may specify for taking necessary steps to comply with such provisions or fulfilment of such conditions.
A [asset reconstruction company] aggrieved by the order of *** cancellation of certificate of registration may prefer an appeal, within a period of thirty days from the date on which [such order of cancellation] is communicated to it, to the Central Government:
Provided that before rejecting an appeal such company shall be given a reasonable opportunity of being heard.
A [asset reconstruction company], which is holding investments of [qualified buyers] and whose whose application for grant of certificate of registration has been rejected or certificate of registration has been cancelled shall, notwithstanding such rejection or cancellation be deemed to be a [asset reconstruction company]until it repays the entire investments held by it (together with interest, if any) within such period as the Reserve Bank may direct.
Amendment notes (7)
- Subs w.e.f. 1-9-2016 . Subs. by s. 3, ibid., for "securitisation company or a reconstruction company" (w.e.f. 1-9-2016).
- Subs w.e.f. 1-9-2016 . Subs. by Act 44 of 2016, s. 3, for "qualified institutional buyer" (w.e.f. 1-9-2016).
- Subs w.e.f. 1-9-2016 . Subs. by s. 3,ibid.,for "securitisation company or reconstruction company" (w.e.f. 1-9-2016).
- Subs w.e.f. 1-9-2016 . Subs. by s. 3, ibid., for "securitisation company or the reconstruction company" (w.e.f. 1-9-2016).
- omitted w.e.f. 11-11-2004 . The words "rejection of application for registration or" omitted by Act 30 of 2004, s. 4 (w.e.f. 11-11-2004).
- Subs w.e.f. 11-11-2004 . Subs. bys. 4,ibid.,for "such order of rejection or cancellation" (w.e.f. 11-11-2004).
- Subs w.e.f. 1-9-2016 . Subs. by Act 44 of 2016, s. 3, for "qualified institutional buyers" (w.e.f. 1-9-2016).