The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted by the Indian Parliament to facilitate the recovery of defaulted loans by banks and financial institutions. Under this Act, banks and financial institutions can seize the assets of a defaulting borrower and sell them to recover the unpaid dues. The Act also allows banks to convert the non-performing assets into tradable securities, which can be sold to investors. This enables banks to recover their dues without having to rely on the borrower to repay the loan. The Act has been instrumental in improving the health of the Indian banking sector by reducing the amount of non-performing assets held by banks.