Multiple choice

Banks can issue notice for enforcement of security interest under SARFAESI Act when

  1. there is default by borrower and security is in possession of the bank

  2. the account is NPA and security is in possession of the bank

  3. the account is suit filed and security is in possession of the bank

  4. the account is suit filed and security is in possession of the borrower
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B Correct answer
Explanation

Banks can issue notice for enforcement of security interest under SARFAESI Act when the account is NPA and security is in possession of the bank. The SARFAESI Act, 2002 gives powers of “seize and desist” to banks. Banks can give a notice in writing to the defaulting borrower requiring it to discharge its liabilities within 60 days. If the borrower fails to comply with the notice, the Bank may take recourse to one or more of the following measures: Take possession of the security for the loan Sale or lease or assign the right over the security Manage the same or appoint any person to manage the same 

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