Question

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 was introduced in Lok Sabha which seeks to amend four laws including the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).Consider the following statements about the SARFAESI Act:

Which of the above statement(s) is/are NOT correct?

• A. Only 1 & 2
• B. Only 2 & 3
• C. Only 1 & 3
• D. None of the above

Answer 1

The correct option is D None of the above

The SARFAESI Act: The Act allows secured creditors to take possession over collateral, against which a loan has been provided, in the case of a default in repayment. This process is undertaken with the assistance of the District Magistrate, and does not require the intervention of courts or tribunals. The Bill provides that this process will have to be completed within 30 days by the Magistrate.
The Act created a central registry to maintain records of transactions related to secured assets (collateral). The Bill creates a central database to integrate records of the central registry with those of other registration systems. This includes integration of registrations made under the Companies Act, 2013, the Registration Act, 1908 and the Motor Vehicles Act, 1988.
The Act empowered the Reserve Bank of India (RBI) to examine the statements and information of asset reconstruction companies related to their business. The Bill further empowers the RBI to also carry out audit and inspection of these companies.