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Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act):
It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor.
It does not differentiate between debtors/borrowers on any basis.
The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions.
Which of the statements given above is/are Correct?
- a)1 and 2 only
- b)2 only
- c)3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding Securitization and Recons...
Option (b) is the correct answer.
- Statement 1 is incorrect. The Central Government administers the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) which allows banks and financial institutions to recover their dues exceeding one lakh rupees by proceeding against secured assets of the borrower/guarantor without the intervention of the court/tribunals.
- Statement 2 is correct. The SARFAESI Act does not differentiate between debtors/borrowers on any basis, including the financial status or debt value.
- Statement 3 is incorrect. The Government is not involved in commercial decisions or recovery proceedings of banks or financial institutions.
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Community Answer
Consider the following statements regarding Securitization and Recons...
SARFAESI Act: Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was enacted by the Indian government to provide a legal framework for banks and financial institutions to recover their dues from borrowers and guarantors by proceeding against secured assets. Let's analyze the given statements:
Statement 1: It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor.
This statement is correct. The SARFAESI Act empowers banks and financial institutions to take action against borrowers/guarantors and recover their dues by enforcing the security interest created in their favor. The Act allows them to take possession and sell the secured assets, transfer the assets to asset reconstruction companies, or take over the management of the borrower's business.
Statement 2: It does not differentiate between debtors/borrowers on any basis.
This statement is correct. The SARFAESI Act does not differentiate between debtors/borrowers on any basis. It applies to all borrowers, whether individuals, partnerships, or companies, and allows banks and financial institutions to take action against them to recover their dues.
Statement 3: The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions.
This statement is incorrect. The Government is involved in the recovery proceedings of banks or financial institutions under the SARFAESI Act. The Act provides for the establishment of Debt Recovery Tribunals (DRTs) and Appellate Tribunals to adjudicate disputes related to the recovery of dues. These tribunals are a part of the judicial system and are constituted by the Central Government. They have the power to hear and decide cases filed by banks and financial institutions under the SARFAESI Act.
Therefore, the correct answer is option B - 2 only.
The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was enacted by the Indian government to provide a legal framework for banks and financial institutions to recover their dues from borrowers and guarantors by proceeding against secured assets. Let's analyze the given statements:
Statement 1: It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor.
This statement is correct. The SARFAESI Act empowers banks and financial institutions to take action against borrowers/guarantors and recover their dues by enforcing the security interest created in their favor. The Act allows them to take possession and sell the secured assets, transfer the assets to asset reconstruction companies, or take over the management of the borrower's business.
Statement 2: It does not differentiate between debtors/borrowers on any basis.
This statement is correct. The SARFAESI Act does not differentiate between debtors/borrowers on any basis. It applies to all borrowers, whether individuals, partnerships, or companies, and allows banks and financial institutions to take action against them to recover their dues.
Statement 3: The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions.
This statement is incorrect. The Government is involved in the recovery proceedings of banks or financial institutions under the SARFAESI Act. The Act provides for the establishment of Debt Recovery Tribunals (DRTs) and Appellate Tribunals to adjudicate disputes related to the recovery of dues. These tribunals are a part of the judicial system and are constituted by the Central Government. They have the power to hear and decide cases filed by banks and financial institutions under the SARFAESI Act.
Therefore, the correct answer is option B - 2 only.
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Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(SARFAESI Act): It allows banks and financial institutions to recover their dues exceeding one crore rupees by proceeding against secured assets of the borrower/guarantor. It does not differentiate between debtors/borrowers on any basis. The Government is involved only in commercial decisions but not in recovery proceedings of banks or financial institutions. Which of the statements given above is/are Correct?a)1 and 2 onlyb)2 onlyc)3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
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