SARFAESI Act in India is related to which of the following sector?
Show answer & explanation
Correct answer: A
Explanation
Correct Answer: Option 1: Financial Sector
Explanation:
In India, the SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) primarily relates to the financial sector. This law empowers banks and other financial institutions to seize and sell collateral to recover their loans if the borrower fails to make payments.
Additional Facts:
Objective: Its main objective is to reduce banks' NPAs (non-performing assets) and improve the financial system.
No court involvement required: Under this Act, banks can take possession of a loan defaulter's secured assets after a 60-day notice without any court intervention.
DRT (Debt Recovery Tribunal): If a borrower objects to a bank's action, they can appeal to the Debt Recovery Tribunal.
Possible questions for upcoming exams:
In which year was the SARFAESI Act passed?
(Answer: 2002).
What is the technical term for banks' 'non-performing assets'?
(Answer: NPA).
How many days' notice is required to be given to the borrower before a property auction under the SARFAESI Act?
(Answer: 60 days).