Multiple choice

Provisions of SARFAESI Act, 2002 applies

  1. to any moveable or immoveable security charged to the bank or financial institution

  2. to mortgage securities only

  3. where the security interests are created for repayment of financial assistance given by the bank or a financial institution.

  4. to the properties owned by the defaulter borrowers, but those that are not charged to the bank.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Banks utilise Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as an effective tool for bad loans (NPA) recovery. It is possible where non-performing assets are backed by securities charged to the Bank by way of hypothecation or mortgage or assignment. Thus, option 3 is the correct answer. 

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