If you are appointed as a Compliance Officer of The Global Bank Ltd., how you will advise to Mr. Rohit Aggarwal, Branch Manager to remove the Knowledge Gaps on Legal and Regulatory Compliance in Banks with regard to proc

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is a legislation that helps financial institutions to ensure asset quality in multiple ways. This means that the Act was framed to address the problem of NPAs (Non-Performing Assets) or bad assets through different processes and mechanisms. The Act stipulates four conditions for enforcing the rights by a creditor. The debt is secured; The debt has been classified as an NPA by the banks; The outstanding dues are one lakh and above and more than 20% of the principal loan amount and interest there on; The security to be enforced is not an Agricultural land. In case the borrower fails to discharge his liability in full within the period specified in sub-section (2) of section 13, the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely: Take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset; Take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset; Appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; Require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.