Bank’s prior approval for change in shareholding

Bank’s prior approval for change in shareholding

In terms of Section 3(6) of the SARFAESI Act, 2002, every Securitisation Company /

Reconstruction Company (SC / RC) is required to obtain prior approval of the

Reserve Bank for any substantial change in its management. For the purpose of this

section, the expression “substantial change in management” means the change in

the management by way of transfer of shares or amalgamation or transfer of the

business of the company. Hence, one of the terms and conditions stipulated to the

SC/RCs, while granting them the Certificate of Registration, states that prior approval

of Reserve Bank will have to be taken by the SC/RCs for any change in their

shareholding pattern