Page 43 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

security receipts (SRs) issued by a securitization run onwindmills installed and any special devices
company or reconstruction company to any qualified including electric generators and pumpsrunning on
institutional buyer pursuant to a scheme, evidencing the wind energy installed, work towards generation of wind
purchase or acquisition by the holder thereof, of an energy. The definition of asset finance business states
undivided right, title or interest in the financial asset that the principal business should be of financing of real/
involved in the securitization. The loan portfolio can be physical assets supporting productive/ economic
standard or non-performing assets (NPA), as the case activity such as automobiles, tractors, lathe machines,
may be, but must be eligible under the AFC criteria for generator sets, earth moving and material handling
equipments, moving on own power and general
the PTCs or SRs to qualify under asset financing
purpose industrial machines -generation of wind energy
criteria.
is also an economic activity for the purpose of asset
Solar power assets finance classification -in line with the examples cited
Whether roof-top solar equipment or solar parks, lease above.
of solar equipments has been doing really well in India. Conclusion
While the solar power industry is inits nascent stage of
The quantum of NBFC-AFCs is quite less compared to
growth, the government though its policies has
the total strength of NBFCs in the country, since the
mandated usagedomestically manufactured solar cells
discretion lies with the RBI to classify a company which
and modules and has set aggressive targets is a financial institution as a loan company or an
forincreasing solar power generation stimulating
investment company or an asset finance company.
growth in solar equipment finance.These solar asset
Considering the difference of opinion in the treatment of
can either be used commercial purpose or retail.
Depending upon the end user, the eligibility shall be several asset eligible as qualifying under AFC
criteria,the final call is taken by the RBI, having regard to
determined. Retail shall not qualify to be supporting any
the principal business of the company and other
economic or productive activity whereas commercial
relevant factors.
may qualify as an eligible asset under AFC.
Windmills
Windmills and any specially designed devices which

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