Banks to avail Sarfaesi laws against defaulters’ loan burden
Banks will now be relieved if the amendments to the Sarfaesi laws is done very soon!
Under the proposed amendments in Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi), banks wil now be allowed to seize the defaulter borrower’s property in any case.
They can even buy the asset and resale it later.
This would allow banks to maintain their account books up to date and recover the loan given. The only drawback is that the seized property may be of less value in comparison to the loan taken by the borrower.
In a worse scenario like now where there is a dip in demand for residential properties, there might be less probability that the properties will be sold or banks will be unable to find a prospective buyer for the property.
Source: The Economic Times
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