A small note on SARFAESI
ACT
What is SARFAESI ACT?
It stands for Securitisation
and Reconstruction of financial assets enforcement of security interest.
It allows banks to auction
properties of the persons who borrow loan from the banks and who fails to
replay their loans.
This act comes in the year
2002. Its main motive is to recover their loan amount and going to a court of
law.
If a customer/borrower
who took loan on property was unable to repay for 6 six months at a stretch
will fall under this law. Banker has to give give notice for 60 days tenure
(under section 13(2) & 13(4) of SARFAESI ACT) to the borrower and surety.
If the amount is not
repaid in that time then bank can sell the property in public auction for
closing the loan account.The price of the property will be evaluated by
Professional valuers according to present market value and banks will set
minimum Bid amount. These bids are published in newspapers for public auction.
If the loan amount is
more than the auction amount, banker will file a separate case for recovery.
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