SARFAESI Act

SARFAESI Act Definition: The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 enables banks and qualified NBFCs to auction residential or commercial properties to recover loans without court intervention.

Why it matters in Debt Collection

• Only applies to secured loans where the outstanding amount is over ₹1 Lakh.
• Requires a strict 60-day demand notice to be sent to the borrower upon NPA classification.
• Drastically reduces the legal timeline of asset recovery from years to months.