IMPORTANT QUESTIONS WITH ANSWERS RELATED TO SARFAESI ACT

1. What does SARFAESI stand for?
   Answer: SARFAESI stands for the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
2. What is the objective of the SARFAESI Act?
   Answer: The objective of the SARFAESI Act is to empower banks and financial institutions to recover their non-performing assets (NPAs) without the intervention of the court.
3. Which financial institutions are covered under the SARFAESI Act?
   Answer: Banks, financial institutions, and asset reconstruction companies (ARCs) are covered under the SARFAESI Act.
4. What is the minimum NPA amount required for a bank to initiate proceedings under the SARFAESI Act?
   Answer: The minimum NPA amount required for a bank to initiate proceedings under the SARFAESI Act is Rs. 1 lakh.
5. Who can initiate proceedings under the SARFAESI Act?
   Answer: Banks and financial institutions that are secured creditors can initiate proceedings under the SARFAESI Act.
6. Can an individual borrower challenge the action taken under the SARFAESI Act?
   Answer: Yes, an individual borrower can challenge the action taken under the SARFAESI Act before the Debt Recovery Tribunal (DRT).
7. What is the role of the Debt Recovery Tribunal (DRT) under the SARFAESI Act?
   Answer: The DRT adjudicates on the applications made by the secured creditors or borrowers against the action taken under the SARFAESI Act.
8. What is the time limit for the Debt Recovery Tribunal (DRT) to pass an order in a SARFAESI case?
   Answer: The DRT is required to pass an order within 60 days from the date of receipt of the application.
9. Can a borrower approach the DRT without repaying the outstanding debt?
   Answer: No, a borrower is required to deposit at least 50% of the outstanding debt before approaching the DRT.
10. Can a bank take possession of the secured assets without the assistance of the District Magistrate?
    Answer: Yes, a bank can take possession of the secured assets without the assistance of the District Magistrate if the borrower does not raise any objection within 60 days.
11. What is the limitation period for the banks to initiate action under the SARFAESI Act?
    Answer: The limitation period for banks to initiate action under the SARFAESI Act is 12 years from the date of the declaration of the account as an NPA.
12. Can a borrower challenge the sale of a secured asset by a bank under the SARFAESI Act?
    Answer: Yes, a borrower can challenge the sale of a secured asset by a bank before the Debts Recovery Appellate Tribunal (DRAT).
13. What is the role of the Central Registry under the SARFAESI Act?
    Answer: The Central Registry maintains records of all transactions related to securitization, asset reconstruction, and creation of security interests under the SARFAESI Act.
14. Can a bank or financial institution take possession of agricultural land under the SARFAESI Act?
    Answer: No, a bank or financial institution cannot take possession of agricultural land under the SARFAESI Act.
15. Can a bank or financial institution sell a residential property under the SARFAESI Act?
    Answer: Yes, a bank or financial institution can sell a residential property under the SARFAESI Act, subject to certain conditions.
16. What is the penalty for non-compliance with the provisions of the SARFAESI Act?
    Answer: Non-compliance with the provisions of the SARFAESI Act can result in a penalty of up to Rs. 5,00,000.
17. Can a bank or financial institution initiate proceedings under the SARFAESI Act if the borrower is a sick industrial company?
    Answer: No, if the borrower is a sick industrial company as defined under the Sick Industrial Companies (Special Provisions) Act, 1985, then proceedings under the SARFAESI Act cannot be initiated.
18. Can a borrower approach the SARFAESI Act against a non-banking financial company (NBFC)?
    Answer: No, the SARFAESI Act applies to banks and financial institutions and does not cover non-banking financial companies (NBFCs).
19. What is the process of asset reconstruction under the SARFAESI Act?
    Answer: The process of asset reconstruction under the SARFAESI Act involves the acquisition of financial assets from banks or financial institutions by asset reconstruction companies (ARCs).
20. What is the role of asset reconstruction companies (ARCs) under the SARFAESI Act?
    Answer: Asset reconstruction companies (ARCs) acquire financial assets from banks and financial institutions and undertake measures to recover the outstanding dues.
21. What is the procedure for the sale of secured assets by banks under the SARFAESI Act?
    Answer: Banks are required to give notice to the borrower before selling the secured assets and follow the procedure prescribed under the SARFAESI Act for the sale.
22. Can a bank or financial institution take possession of the secured assets if the borrower is a woman?
    Answer: Yes, a bank or financial institution can take possession of the secured assets, irrespective of the borrower’s gender, if there is default in repayment.
23. Can a borrower challenge the possession of secured assets by a bank under the SARFAESI Act?
    Answer: Yes, a borrower can challenge the possession of secured assets by a bank before the Debt Recovery Tribunal (DRT).
24. Can a bank or financial institution take possession of the secured assets if there is a pending legal proceeding?
    Answer: No, a bank or financial institution cannot take possession of the secured assets if there is a pending legal proceeding related to the same assets.
25. Can a bank or financial institution sell the secured assets before the expiry of the notice period?
    Answer: No, a bank or financial institution cannot sell the secured assets before the expiry of the notice period mentioned in the notice issued to the borrower.
26. Can a borrower approach the Debt Recovery Tribunal (DRT) against the action taken by a bank under the SARFAESI Act?
    Answer: Yes, a borrower can approach the Debt Recovery Tribunal (DRT) to challenge the action taken by a bank under the SARFAESI Act.
27. What is the role of the Reserve Bank of India (RBI) in implementing the SARFAESI Act?
    Answer: The Reserve Bank of India (RBI) is responsible for monitoring the implementation of the SARFAESI Act by banks and financial institutions.
28. Can a borrower challenge the order passed by the Debt Recovery Tribunal (DRT) under the SARFAESI Act?
    Answer: Yes, a borrower can challenge the order passed by the Debt Recovery Tribunal (DRT) before the Appellate Tribunal for Debt Recovery (DRAT).
29. Can a bank or financial institution take possession of the secured assets if the borrower is a partnership firm?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a partnership firm and there is a default in repayment.
30. Can a bank or financial institution take possession of the secured assets if the borrower is an individual?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an individual and there is a default in repayment.
31. Can a borrower approach the Appellate Tribunal for Debt Recovery (DRAT) against the order passed by the Debt Recovery Tribunal (DRT)?
    Answer: Yes, a borrower can approach the Appellate Tribunal for Debt Recovery (DRAT) to challenge the order passed by the Debt Recovery Tribunal (DRT).
32. Can a bank or financial institution take possession of the secured assets if the borrower is a company?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a company and there is a default in repayment.
33. Can a bank or financial institution take possession of the secured assets if the borrower is a trust?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a trust and there is a default in repayment.
34. Can a borrower challenge the order passed by the Appellate Tribunal for Debt Recovery (DRAT) under the SARFAESI Act?
    Answer: Yes, a borrower can challenge the order passed by the Appellate Tribunal for Debt Recovery (DRAT) before the High Court.
35. What is the process of securitization under the SARFAESI Act?
    Answer: The process of securitization under the SARFAESI Act involves the conversion of financial assets into marketable securities, which are then sold to investors.
36. Can a bank or financial institution take possession of the secured assets if the borrower is a cooperative society?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a cooperative society and there is a default in repayment.
37. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act after the sale of the secured assets?
    Answer: No, once the secured assets are sold by a bank or financial institution, the borrower cannot challenge the action taken under the SARFAESI Act.
38. Can a borrower approach the High Court against the order passed by the Appellate Tribunal for Debt Recovery (DRAT)?
    Answer: Yes, a borrower can approach the High Court to challenge the order passed by the Appellate Tribunal for Debt Recovery (DRAT).
39. Can a bank or financial institution take possession of the secured assets if the borrower is a government company?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a government company and there is a default in repayment.
40. Can a borrower approach the Supreme Court against the order passed by the High Court under the SARFAESI Act?
    Answer: Yes, a borrower can approach the Supreme Court to challenge the order passed by the High Court under the SARFAESI Act.
41. Can a bank or financial institution take possession of the secured assets if the borrower is a public sector undertaking (PSU)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a public sector undertaking (PSU) and there is a default in repayment.
42. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a micro, small, or medium enterprise (MSME)?
    Answer: Yes, a borrower who is a micro, small, or medium enterprise (MSME) can challenge the action taken by a bank or financial institution under the SARFAESI Act.
43. Can a borrower approach the National Company Law Tribunal (NCLT) against the action taken by a bank or financial institution under the SARFAESI Act?
    Answer: No, a borrower cannot approach the National Company Law Tribunal (NCLT) against the action taken by a bank or financial institution under the SARFAESI Act.
44. Can a bank or financial institution take possession of the secured assets if the borrower is a non-resident Indian (NRI)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a non-resident Indian (NRI) and there is a default in repayment.
45. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a foreign company?
    Answer: No, a borrower who is a foreign company cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
46. Can a bank or financial institution take possession of the secured assets if the borrower is a government authority?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a government authority and there is a default in repayment.
47. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a partnership firm with limited liability?
    Answer: Yes, a borrower who is a partnership firm with limited liability can challenge the action taken by a bank or financial institution under the SARFAESI Act.
48. Can a bank or financial institution take possession of the secured assets if the borrower is a local authority?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a local authority and there is a default in repayment.
49. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is an educational institution?
    Answer: Yes, a borrower who is an educational institution can challenge the action taken by a bank or financial institution under the SARFAESI Act.
50. Can a bank or financial institution take possession of the secured assets if the borrower is a statutory corporation?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a statutory corporation and there is a default in repayment.
51. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a housing finance company?
    Answer: No, a borrower who is a housing finance company cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
52. Can a bank or financial institution take possession of the secured assets if the borrower is a registered society?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a registered society and there is a default in repayment.
53. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a cooperative bank?
    Answer: No, a borrower who is a cooperative bank cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
54. Can a bank or financial institution take possession of the secured assets if the borrower is an infrastructure finance company?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an infrastructure finance company and there is a default in repayment.
55. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is an insurance company?
    Answer: No, a borrower who is an insurance company cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
56. Can a bank or financial institution take possession of the secured assets if the borrower is a foreign bank?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a foreign bank and there is a default in repayment.
57. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is an asset reconstruction company (ARC)?
    Answer: No, a borrower who is an asset reconstruction company (ARC) cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
58. Can a bank or financial institution take possession of the secured assets if the borrower is a mutual fund?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a mutual fund and there is a default in repayment.
59. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a securitization company?
    Answer: No, a borrower who is a securitization company cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
60. Can a bank or financial institution take possession of the secured assets if the borrower is a non-banking financial company (NBFC)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a non-banking financial company (NBFC) and there is a default in repayment.
61. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a trust registered under the Indian Trusts Act, 1882?
    Answer: Yes, a borrower who is a trust registered under the Indian Trusts Act, 1882 can challenge the action taken by a bank or financial institution under the SARFAESI Act.
62. Can a bank or financial institution take possession of the secured assets if the borrower is an industrial finance corporation?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an industrial finance corporation and there is a default in repayment.
63. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a cooperative housing society?
    Answer: Yes, a borrower who is a cooperative housing society can challenge the action taken by a bank or financial institution under the SARFAESI Act.
64. Can a bank or financial institution take possession of the secured assets if the borrower is a regional rural bank?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a regional rural bank and there is a default in repayment.
65. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a small finance bank?
    Answer: No, a borrower who is a small finance bank cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
66. Can a bank or financial institution take possession of the secured assets if the borrower is a payment system provider?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a payment system provider and there is a default in repayment.
67. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a primary agricultural credit society?
    Answer: No, a borrower who is a primary agricultural credit society cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
68. Can a bank or financial institution take possession of the secured assets if the borrower is a non-banking financial institution (NBFI)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a non-banking financial institution (NBFI) and there is a default in repayment.
69. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a foreign institutional investor (FII)?
    Answer: No, a borrower who is a foreign institutional investor (FII) cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
70. Can a bank or financial institution take possession of the secured assets if the borrower is a housing finance institution?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a housing finance institution and there is a default in repayment.
71. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a public-private partnership (PPP) entity?
    Answer: Yes, a borrower who is a public-private partnership (PPP) entity can challenge the action taken by a bank or financial institution under the SARFAESI Act.
72. Can a bank or financial institution take possession of the secured assets if the borrower is an infrastructure debt fund (IDF)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an infrastructure debt fund (IDF) and there is a default in repayment.
73. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a government-sponsored organization?
    Answer: Yes, a borrower who is a government-sponsored organization can challenge the action taken by a bank or financial institution under the SARFAESI Act.
74. Can a bank or financial institution take possession of the secured assets if the borrower is an alternative investment fund (AIF)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an alternative investment fund (AIF) and there is a default in repayment.
75. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a development finance institution?
    Answer: Yes, a borrower who is a development finance institution can challenge the action taken by a bank or financial institution under the SARFAESI Act.
76. Can a bank or financial institution take possession of the secured assets if the borrower is a regional rural cooperative bank?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a regional rural cooperative bank and there is a default in repayment.
77. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a non-banking financial company-microfinance institution (NBFC-MFI)?
    Answer: Yes, a borrower who is a non-banking financial company-microfinance institution (NBFC-MFI) can challenge the action taken by a bank or financial institution under the SARFAESI Act.
78. Can a bank or financial institution take possession of the secured assets if the borrower is a pension fund regulatory and development authority (PFRDA)-registered entity?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a pension fund regulatory and development authority (PFRDA)-registered entity and there is a default in repayment.
79. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a regional rural development bank?
    Answer: Yes, a borrower who is a regional rural development bank can challenge the action taken by a bank or financial institution under the SARFAESI Act.
80. Can a bank or financial institution take possession of the secured assets if the borrower is a commodity exchange?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a commodity exchange and there is a default in repayment.
81. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a clearing corporation?
    Answer: No, a borrower who is a clearing corporation cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
82. Can a bank or financial institution take possession of the secured assets if the borrower is a depository?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a depository and there is a default in repayment.
83. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a central counterparty?
    Answer: No, a borrower who is a central counterparty cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
84. Can a bank or financial institution take possession of the secured assets if the borrower is a stock exchange?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a stock exchange and there is a default in repayment.
85. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a custodian of securities?
    Answer: No, a borrower who is a custodian of securities cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
86. Can a bank or financial institution take possession of the secured assets if the borrower is a recognized clearing corporation?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a recognized clearing corporation and there is a default in repayment.
87. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a credit rating agency?
    Answer: No, a borrower who is a credit rating agency cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
88. Can a bank or financial institution take possession of the secured assets if the borrower is a trade repository?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a trade repository and there is a default in repayment.
89. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a payment system operator?
    Answer: No, a borrower who is a payment system operator cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
90. Can a bank or financial institution take possession of the secured assets if the borrower is a systemically important non-banking financial company (NBFC)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a systemically important non-banking financial company (NBFC) and there is a default in repayment.
91. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a public financial institution?
    Answer: Yes, a borrower who is a public financial institution can challenge the action taken by a bank or financial institution under the SARFAESI Act.
92. Can a bank or financial institution take possession of the secured assets if the borrower is a non-banking financial company-infrastructure debt fund (NBFC-IDF)?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a non-banking financial company-infrastructure debt fund (NBFC-IDF) and there is a default in repayment.
93. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a regulated foreign portfolio investor?
    Answer: No, a borrower who is a regulated foreign portfolio investor cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
94. Can a bank or financial institution take possession of the secured assets if the borrower is a central counterparty clearing house?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a central counterparty clearing house and there is a default in repayment.
95. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is an insolvency professional agency?
    Answer: No, a borrower who is an insolvency professional agency cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
96. Can a bank or financial institution take possession of the secured assets if the borrower is a settlement guarantee fund?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a settlement guarantee fund and there is a default in repayment.
97. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is an intermediary registered with the Securities and Exchange Board of India (SEBI)?
    Answer: Yes, a borrower who is an intermediary registered with the Securities and Exchange Board of India (SEBI) can challenge the action taken by a bank or financial institution under the SARFAESI Act.
98. Can a bank or financial institution take possession of the secured assets if the borrower is a recognized stock exchange?
    Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is a recognized stock exchange and there is a default in repayment.
99. Can a borrower challenge the action taken by a bank or financial institution under the SARFAESI Act if the borrower is a foreign portfolio investor?
    Answer: No, a borrower who is a foreign portfolio investor cannot challenge the action taken by a bank or financial institution under the SARFAESI Act.
100. Can a bank or financial institution take possession of the secured assets if the borrower is an insolvency professional entity?
     Answer: Yes, a bank or financial institution can take possession of the secured assets if the borrower is an insolvency professional entity and there is a default in repayment.