History of SARFAESI Act, 2002

-In 1991, Narasimham Committee – I (Committee on the Financial System) observed that borrowers obtain stay orders from ordinary courts, so banks and financial institutions face difficulty while recovering Non-Performing Assets(NPAs). Hence, to strengthen this process, Debt Recovery Tribunals were set up in 1993, and the loan recovery process was made beyond the jurisdiction of ordinary courts.
– In 1998, Narasimham Committee – II (Committee on Banking Sector Reforms) observed that Debt Recovery Tribunals (DRTs) need to be strengthened with a law, So, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act enacted in the 2002.

The SARFAESI Act allows banks and other financial institutions for auctioning commercial or residential properties to recover a loan when a borrower fails to repay the loan amount. Thus, the SARFAESI Act, 2002 enables banks to reduce their Non-Performing Assets (NPAs) through recovery methods and reconstruction.
SARFAESI Act 2002 is a milestone in the recovery of NPAs.


Leave a Reply

Your email address will not be published. Required fields are marked *

This field is required.

This field is required.


The following disclaimer governs the use of this website (“Website”) and the services provided by the Law offices of Kr. Vivek Tanwar Advocate & Associates in accordance with the laws of India. By accessing or using this Website, you acknowledge and agree to the terms and conditions stated in this disclaimer.

The information provided on this Website is for general informational purposes only and should not be considered as legal advice or relied upon as such. The content of this Website is not intended to create, and receipt of it does not constitute, an attorney-client relationship between you and the Law Firm. Any reliance on the information provided on this Website is done at your own risk.

The Law Firm makes no representations or warranties of any kind, express or implied, regarding the accuracy, completeness, reliability, or suitability of the information contained on this Website.

The Law Firm disclaims all liability for any errors or omissions in the content of this Website or for any actions taken in reliance on the information provided herein. The information contained in this website, should not be construed as an act of solicitation of work or advertisement in any manner.