Banking FinanceAct No. 54 of 2002In Force

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

Empowers banks and financial institutions to enforce their security interest without court intervention for recovery of non-performing assets (NPAs). The Act also provides for securitisation of financial assets and establishment of asset reconstruction companies (ARCs) like NARCL. Borrowers have limited recourse to the Debt Recovery Tribunal (DRT) under S.17.

Sections

Schedules

Ministry

Ministry of Finance

Last Amended

2016-08-12

Key Provisions

→Enforcement of security interest without court order — possession, sale, management

→Notice to borrower: 60-day notice before taking action

→Secured creditor: can take possession and sell secured assets

→Asset Reconstruction Companies (ARCs): acquisition and management of NPAs

→Securitisation: issuance of security receipts

→DRT jurisdiction: borrower's appeal under S.17 within 45 days

→Application to residential properties: housing loan defaults

→Central Registry of Securitisation and Asset Reconstruction (CERSAI)

Related Practice Areas

banking-finance insolvency-restructuring commercial-litigation

SARFAESINPAsecurity enforcementARCDRTbank recoverynon-performing assets

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Indian government legislation is in the public domain under S.52(1)(q) of the Copyright Act, 1957. This reference is for educational purposes. Laws are amended frequently — verify the current text on the e-Gazette of India before relying on it for legal proceedings.