Key points of SARFAESI act

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is a significant piece of legislation in India aimed at improving the efficiency of the banking sector. Here are some key points of the SARFAESI Act:

1. Enables banks and financial institutions to take over and manage the assets of defaulting borrowers in a timely manner.
2. Allows banks to recover their non-performing assets (NPAs) by selling the collateral security without the intervention of the court.
3. Provides a framework for banks and financial institutions to enforce their security interest in a more efficient manner, reducing the time and cost involved in the recovery process.
4. Establishes the Debt Recovery Tribunals (DRTs) as the primary forum for resolution of disputes related to secured debt.
5. Gives banks the power to take possession of the secured assets, manage them and sell them to recover their dues.
6. Provides for penalties for obstruction of the recovery process by borrowers.
7. The act applies to all banks and financial institutions regulated by the Reserve Bank of India.

Overall, the SARFAESI Act provides a framework for the effective and efficient recovery of NPAs by banks and financial institutions, reducing the time and cost involved in the recovery process.