Sarfaesi act Essay Example for Free

Sarfaesi act EssayThe Securitization Reconstruction of Financial Assets Enforcement of Security Interest Act,2002 (SARFAESI) empowers banks financial institutions to deduct their non-performing assets without intervention of court. The Act provides 3 alternate methods for recovering of NPA namely- Securitization Asset Reconstruction Enforcement of security without intervention of court Provisions of this Act are applicable but for NPA loans with outstanding balance bove 1 lakh rupees.NPA loan accounts where the amount is less than 20% of the principal and Interest are not eligible to be dealt with at a lower place this Act. NPAs should be backed by securities charged to the bank by way of hypothecation or mortgage or assignment-security Interest by way of purchase and take in not liable for attachment under Sec 60 of CPC ,are not covered under this Act. Strengths of the Act- The Act empowers the Bank 1 . To Issue demand notices to the defaulting borrower and guarantor,call lng upon sew together to discharge their dues in full within 60 days from the date of notice.