The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 empowers secured lenders to enforce their security — taking possession of and selling mortgaged/pledged assets of defaulting borrowers — outside the court process, which speeds up NPA recovery. It applies to secured loans above a threshold.
Example
After a borrower defaults on a secured business loan, the bank issues a SARFAESI notice and can take possession of the pledged property to recover its dues.
Relevant NISM series
See SARFAESI Act in exam questions
1,200+ NISM practice questions. Free to start.