Discussion
With which of the following is SARFAESI Act 2002 related?
Answer: A
Correct answer: Recovery of bad loans
The SARFAESI Act 2002 lets a secured creditor enforce its security without going to court: after a defaulting borrower fails to respond to a sixty-day notice, the bank may take possession of the secured asset and sell it.
Its purpose was speed. Recovery through the ordinary courts and even through the debt recovery tribunals had become so slow that security was of little practical value, which raised the cost of credit for everyone. The Act shifted the initiative to the creditor, leaving the borrower to approach the tribunal if aggrieved.
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