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    Sarfaesi Act

    Uploaded by

    Duddukuri Srikar
    The document summarizes recent amendments made to the SARFAESI Act and DRT Act in India. Key changes include: 1) Establishing a process for asset reconstruction companies to take over bank cases; 2) Allowing debt conversion to equity; 3) Allowing banks to purchase auctioned properties if below reserve price but requiring sale within 12 years. For the DRT Act, changes include: 1) Including cooperative banks under the Act's purview; 2) Requiring borrowers to file a written statement within 30 days or risk extensions; 3) Requiring daily DRT proceedings; 4) Limiting adjournments to streamline recovery processes. The amendments aim to expedite debt recovery and eliminate delays.

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    Sarfaesi Act

    Uploaded by

    Duddukuri Srikar
    40 views1 page
    The document summarizes recent amendments made to the SARFAESI Act and DRT Act in India. Key changes include: 1) Establishing a process for asset reconstruction companies to take over bank cases; 2) Allowing debt conversion to equity; 3) Allowing banks to purchase auctioned properties if below reserve price but requiring sale within 12 years. For the DRT Act, changes include: 1) Including cooperative banks under the Act's purview; 2) Requiring borrowers to file a written statement within 30 days or risk extensions; 3) Requiring daily DRT proceedings; 4) Limiting adjournments to streamline recovery processes. The amendments aim to expedite debt recovery and eliminate delays.

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    The document summarizes recent amendments made to the SARFAESI Act and DRT Act in India. Key changes include: 1) Establishing a process for asset reconstruction companies to take over bank cases; 2) Allowing debt conversion to equity; 3) Allowing banks to purchase auctioned properties if below reserve price but requiring sale within 12 years. For the DRT Act, changes include: 1) Including cooperative banks under the Act's purview; 2) Requiring borrowers to file a written statement within 30 days or risk extensions; 3) Requiring daily DRT proceedings; 4) Limiting adjournments to streamline recovery processes. The amendments aim to expedite debt recovery and eliminate delays.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    40 views1 page

    Sarfaesi Act

    Uploaded by

    Duddukuri Srikar
    The document summarizes recent amendments made to the SARFAESI Act and DRT Act in India. Key changes include: 1) Establishing a process for asset reconstruction companies to take over bank cases; 2) Allowing debt conversion to equity; 3) Allowing banks to purchase auctioned properties if below reserve price but requiring sale within 12 years. For the DRT Act, changes include: 1) Including cooperative banks under the Act's purview; 2) Requiring borrowers to file a written statement within 30 days or risk extensions; 3) Requiring daily DRT proceedings; 4) Limiting adjournments to streamline recovery processes. The amendments aim to expedite debt recovery and eliminate delays.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    SARFAESI ACT & DRT ACT AMENDED

    The amendments to the Securitization and Reconstruction of Financial Assets and Enforcement
    of Security Interest Act, 2002 ("SARFAESI Act") and the Recovery of Debts Due to Banks and
    Financial Institutions Act, 1993 ("DRT Act") have now been notified. The important features of
    the amendments are outlined below:
    SARAESI Act:
    A formal procedure has been prescribed for taking into record the substitution of banks by asset
    reconstruction companies ("ARCs") and securitization companies in any proceedings pending
    before any tribunal/ court/ other authority ("Authority") in respect of the financial assets which
    the ARCs and securitization companies have acquired from such bank.
    ARCs and securitization companies have been permitted to convert any portion of the debt due
    to them by the borrower into equity shares of the borrower company.
    The banks have been permitted to purchase the immovable property which has been furnished to
    them as security and which is being sold under an auction process provided the purchase price
    offered by other auctioneers in respect thereto, is below the reserve price set by the bank. The
    bank can hold such property for a maximum period of 12 (Twelve) years after which the bank is
    mandatorily required to dispose of such property in compliance with the BR Act.
    DRT Act:
    The definition of banks under the DRT Act has now been widened to include multi-state
    cooperative banks ("Cooperative Banks").
    In view of the aforesaid, the Cooperative Banks are now permitted initiate proceedings for
    recovery of their dues either under the DRT Act or under the provisions of Multi-State Co-
    operative Societies Act, 2002.
    The defaulting borrower is now required to file its written statement with the debt recovery
    tribunal ("DRT") within 30 (Thirty) days of being notified by DRT in this regard. However,
    DRT can grant a maximum of 2 (Two) extensions to the borrower in this regard under
    exceptional circumstances.
    The DRT proceedings are now required to be held on a daily basis.
    While single parties will now be allowed only 3 (Three) adjournments in proceedings before the
    DRT, in cases where there are 3 (Three) or more parties the maximum number of such
    adjournments has been limited to 6 (Six).
    The amendments made to the SARFAESI Act and the DRT Act is a step welcomed by many as it
    is aimed at speeding up the process of recovery of debts due to banks and financial institutions,
    by eliminating the loopholes being used to delay the recovery proceedings being filed against
    defaulters.

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