Consider the following statements about Securitisation and Reconstruction of Financial Assets and En...........

Economic Affairs Types of Banks and Banking

Consider the following statements about Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act –

1. It allows banks to take possession of residential or commercial properties to recover loans without intervention of the court.

2. False cases of criminal trespass are filed against authorised officers by the borrowers under the act resulted in decision-making paralysis.

Which of the statement given above is / are correct?

1 only

2 only

Both 1 & 2

Neither 1 nor 2

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Explanation:

SARFAESI Act, 2002 empowers that WITHOUT INTERVENTION OF ANY COURT OR TRIBUNAL secured creditor may take possession (including sale, lease, assignment) of secured asset, or take over management of business of borrower or appoint manager for secured asset. False cases of criminal trespass are being filed under the act that has resulted in demoralisation of the work force and caused decision-making paralysis.