What is SARFAESI?
SARFAESI, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, enacted in 2002 in India, empowers banks to recover non-performing assets (NPAs) without court intervention. Banks issue demand notices, seize assets, and sell or lease them to recover debt. From a company's standpoint, SARFAESI aids in NPA recovery, minimizing losses. Legal guidance is vital for navigating SARFAESI's intricate procedures, ensuring compliance, and safeguarding interests. It clarifies rights and obligations, mitigates risks, and facilitates effective recovery while adhering to SARFAESI's legal framework. It empowers the bank to seize the possession of the secured assets without any Court's intervention. However, adherence to the prescribed process outlined in the SARFAESI Act is crucial for the validity of actions taken by banking institutions. If the banks fail to follow the procedures specified in the SARFAESI Act, it could render the entire process void and expose the institutions to legal challenges and potential liabilities.