Securitisation and Reconstruction of Financial Assets & Security Interest, 2002


SARFAESI, 2002- Securitisation and Reconstruction of Financial Assets & Security Interest, 2002 , Amendment in 2004.

Amendments Expected- Central Depository to keep account of all docs, ARC’s Indian Stamp act not applicable, Judge age to be increased from 62-65 DRT- 65-67 DRAT, Jurisdiction to be of bank’s branch location, and DRT to be more stronger, hire purchase and lease agreement to be included with ARC’s to take 100% control of the asset control. DM will assist in taking possession and no civil courts to intervene.

Loans applicable- Auto, Student loans, Mortgages, Credit card Receivables, Lease payments, Accounts receivables.

When Applicable- Account less than 1 lakh or where principal plus interest in more than 20 % to be proceeded under this act. Agricultural land cannot be proceeded under Sarfaesi. Authorised officer can be Chief Manager.

Steps-
        0. NPA declared as per RBI guidelines.
1.       Account classified NPA u/s 13 (2)
2.       Notice to borrower & discharge his liabilities within 60 days.
3.       Borrower makes representations than AO will reply in 7 days.
4.       Exercise or all any rights u/s 13 (4)- Take possession, management, appoint manager, or ask the acquired person to pay debt. DM will assist in taking possession. Send possession notice within 7 days to clear all the dues.
5.       Sale of Moveable Asset, after 20 days of possession notice to borrower of sale in 30 days. Mortgagor can apply to DRT for stay. Sale notice in Hindi and English plus pasted at conspicuous part of property. Put in on ministry website.

Rules for Moveable Property- Sarfaesi , Security Interest Rules 2002 will Apply. After taking possession , Sale Notice along with 30 days given to borrower and then the item is sold with sale certificate given to the purchaser.
Location: Pnb House, Bank Square, Sector 17 Bd, R T-II, Sector-17, Chandigarh, 160017, India

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