Multiple choice

Where a company has been financed by a consortium of banks, the decision to take possession and sell the security under SARFAESI Act is to be taken by

  1. the banks having 75% share by value on the record date, in the consortium

  2. all the major banks financing the company

  3. the lead bank in the consortium

  4. the banks having 60% share by value on the record date, in the consortium
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In case there is a broad agreement, the account would be classified as a fraud, else based on the majority rule of agreement amongst banks with at least 60% share in the total lending, the account would be red flagged by all the banks and subjected to a forensic audit commissioned or initiated by the consortium leader or the largest lender.

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