BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Banking Regulation Act 1949
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Foreign Exchange Management Act(FEMA) 1999
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Industrial Disputes Act 1947
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SARFAESI Act, 2002
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Detailed explanation-1: -The SARFAESI Act was enacted with the intention of allowing banks and other financial institutions (FIs) to recuperate on NPAs without the intervention of a court. The non performing assets are defined under Section 2(1) of the Act.
Detailed explanation-2: -SARFAESI Act is a law that allows Indian banks and financial institutions to sell or auction the assets/properties of credit defaulters without any intervention from the courts. Under the SARFAESI Act, a Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) is also constituted.
Detailed explanation-3: -The act states that every bank in India can claim their right to enjoy the security given by the defaulting borrower against the amount of money taken for loan and then sell it to manage the loss experienced by the lender. The SARFAESI Act 2002 gives them the liberty to use the mechanism to minimize the NPAs.
Detailed explanation-4: -Section 9 of SARFAESI Act, 2002: Measures for assets reconstruction.