BANKING AFFAIRS

Detailed explanation-1: -(1) This Act may be called the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (2) It extends to the whole of India. (3) It shall be deemed to have come into force on the 21st day of June, 2002.

Detailed explanation-2: -The SARFAESI Act has two main objectives, namely: Recovering the financial institutions’ and banks’ non-performing assets (NPAs) in a timely and effective manner. Allows financial organisations and banks to sell residential and commercial assets at auction if a borrower defaults on his or her debt.

Detailed explanation-3: -The SARFAESI Act also provides for the establishment of Asset Reconstruction Companies regulated by RBI to gain assets from banks and financial institutions. The Act provides for the sale of financial assets by banks and financial institutions to asset reconstruction companies.

Detailed explanation-4: -Provisions (Amendment) Act, 2016 came in force on 12th August 2016 for the purpose of making amendments in Sarfaesi Act, 2020, however, different sections were notified on different dates. 1.

Detailed explanation-5: -The first asset reconstruction company (ARC) of India, ARCIL, was set up under this act. By virtue of the SARFAESI Act 2002, the Reserve Bank of India has the authority to register and regulate Asset Reconstruction Companies (ARCs).