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      Question

      As per Section 2(1)(ba) of the SARFAESI Act (as amended

      by the Enforcement of Security Interest and Recovery of Debts Laws Amendment Act, 2016), an 'asset reconstruction company' means a company registered with which authority?
      A Securities and Exchange Board of India Correct Answer Incorrect Answer
      B Ministry of Finance, Government of India Correct Answer Incorrect Answer
      C Registrar of Companies Correct Answer Incorrect Answer
      D Reserve Bank of India under Section 3 of the Act Correct Answer Incorrect Answer
      E National Company Law Tribunal Correct Answer Incorrect Answer

      Solution

      Section 2(1)(ba), inserted by the 2016 Amendment Act, defines 'asset reconstruction company' as a company registered with the Reserve Bank of India under Section 3 of the SARFAESI Act for the purpose of carrying on the business of asset reconstruction or securitisation, or both. Prior to the 2016 amendment, these were called 'securitisation companies' or 'reconstruction companies'. The RBI is the sole regulatory authority for ARCs, not SEBI or the Ministry of Finance. Registration with RBI under Section 3 is mandatory before commencement of ARC business - this is a key testable provision.

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