BANKING AFFAIRS

Detailed explanation-1: -The SARFAESI Act isn’t applicable for: The NPA loan accounts amounting to less than 20% of the principal and interest. Money or security issued under the Indian Contract Act or the Sale of Goods Act, 1930. Any rights of the unpaid seller under Section 47 of the Sale of Goods Act, 1930.

Detailed explanation-2: -The Supreme Court held that, in SARFAESI proceedings, the burden is upon the borrower to prove that the secured properties are agricultural lands and actually being used as agricultural lands and/or agricultural activities.

Detailed explanation-3: -The Supreme Court recently held that the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) will be applicable to cooperative banks, and not just commercial banks.

Detailed explanation-4: -The requirement of registration under section 20 of the SARFAESI Act is therefore applicable to all mortgages of property by deposit of title deeds created on and after the date of publication of the Rules in the Official Gazette.

Detailed explanation-5: -Is there a threshold for applicability of SARFAESI Act on NBFCs? Yes, eligible NBFCs are allowed to enforce security interest in cases where the security interest was created in their favour to secure a financial assistance having a debt (as defined under SARFAESI Act) amounting to Rs. 50 lacs.