The SARFAESI Act, which stands for the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, is an Indian law enacted to empower banks and financial institutions to recover their non-performing assets (NPAs) efficiently. It provides a legal framework for the enforcement of security interests in movable and immovable properties, primarily to address the issue of bad loans in the banking sector.
The reference to "45 days" in the SARFAESI Act typically pertains to a specific provision related to the notice period required before the lender can take possession of the secured assets. Here's how it works:
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Default by Borrower: When a borrower defaults on a loan, and the account becomes a non-performing asset (NPA), the lender (usually a bank or financial institution) can initiate the SARFAESI process.
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Notice to Borrower: The lender is required to issue a notice to the borrower specifying the amount due and demanding payment within 60 days from the date of the notice.
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Opportunity for Borrower: The borrower has 45 days from the receipt of the notice to rectify the default and clear the outstanding dues.
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Possession of Assets: If the borrower fails to comply with the notice within the stipulated 45 days, the lender has the right to take possession of the secured assets without the need for a court order. This allows the lender to sell or transfer the assets to recover the outstanding loan amount.
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Right to Appeal: The borrower can appeal against the lender's actions to the Debt Recovery Tribunal (DRT) within 45 days from the date of possession.
It's important to note that the SARFAESI Act contains various provisions and procedures for the enforcement of security interests and recovery of NPAs, and the 45-day period mentioned here is just one aspect of the overall process. The Act aims to provide a faster and more efficient mechanism for banks and financial institutions to recover their dues by taking possession of and selling the secured assets in case of default.
