SARFAESI EXECUTION

The SARFAESI Act includes: Empowerment of banks to issue notices to defaulting borrowers. Authority to take possession of secured assets under specified conditions. Establishment of asset reconstruction companies (ARCs) to manage and recover bad debts.

Overview of SARFAESI Act

The SARFAESI Act was introduced to address the increasing issue of non-performing assets (NPAs) plaguing financial institutions. Its primary objectives include:

• Facilitating the quick recovery of loans by banks and financial institutions.
• Empowering lenders to enforce security interests without court intervention.
• Strengthening financial stability by reducing NPAs and managing liquidity mismatches.
• Providing a legal framework for the reconstruction and management of distressed assets.