India’s SARFAESI Act sets a clear, end-to-end playbook for how Asset Reconstruction Companies (ARCs) are registered, how they acquire stressed assets, how obligors are notified, how security receipts are issued, what measures ARCs can deploy to resolve assets, how disputes are addressed, and the supervisory powers available to the Reserve Bank of India (RBI) to…
The SARFAESI framework establishes how securitisation and asset reconstruction companies (ARCs) are licensed, governed, and supervised, and how financial assets are acquired, managed, and resolved, with clear roles for obligors, investors, and the Reserve Bank of India. This article synthesizes the operational touchpoints a banking audience needs: licensing and cancellation, asset acquisition mechanics, obligor notices…
The SARFAESI Act, 2002 is a cornerstone law empowering banks and financial institutions in India to recover non-performing assets swiftly, primarily by allowing the enforcement of security interests without prior court intervention. Indian courts have affirmed the constitutional validity of the Act, ensuring its mechanisms are both effective and just. Preamble and Overview The full…
Supreme Court while delivering judgment [NKGSB Cooperative Bank Limited vs Subir Chakravarty | SLP (C) 30240 OF 2019 | 25 February 2022 Coram: Justices AM Khanwilkar and Justice CT Ravikumar] said that the District Magistrate or the Chief Metropolitan Magistrate can appoint an advocate commissioner to assist him/her in the execution of the order passed…
The Supreme Court on Tuesday (May 05, 2020) held that cooperative banks come under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act 2002 (SARFAESI Act). The SARFAESI Act law empowers lenders to seize and sell defaulters’ assets. A five members constitution bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, M.R.…
RBI on Monday asked all the Regulated Entities (REs) of the Reserve Bank to display information on secured assets possessed under the SARFAESI Act, 2002. “As a part of the move towards greater transparency, it has been decided that the Regulated Entities (REs) of the Reserve Bank which are secured creditors as per the Securitisation…
The Ombudsman Scheme provides a mechanism for passing an Award in favor of a complainant and establishes a structured right to appeal against such Awards or certain rejections; further, the scheme can be suspended by the Reserve Bank of India (RBI) if necessary for regulatory reasons. Passing of an Award Right to Prefer Appeal Suspension…
Latest: A few sections relating to registration of security interest by secured and other creditors, the effect of registration of transactions, right of enforcement of securities, and priority to secured creditors were not notified in the said amendment. In view of the foregoing Section 17 to Section 19 of the 2016 Act have been notified…
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is a foundational legislation in India that aims to promote, develop, and enhance the competitiveness of micro, small and medium enterprises (MSMEs). For banking professionals, understanding its regulatory framework is crucial to effectively support MSMEs and comply with mandated standards. Objectives and Scope The MSMED…
The Memorandum of Micro, Small and Medium Enterprises refers to the formal self-declaration process introduced for MSME registration, enabling enterprises to receive recognition and access government benefits. Previously known as the Entrepreneur Memorandum (EM-II) and Udyog Aadhaar Memorandum (UAM), this system is now replaced by the Udyam Registration—a fully online, self-declaration based procedure on the…
