What is Sarfaesi Act?
- The Act details the procedures for NPAs’ transfer to the asset reconstruction companies for the purpose of asset reconstruction.
- The Act specifies the legal framework for scanning activities in India.
- The Act confers powers to the financial institutions to take custody of the immovable property, which is charged or hypothecated, for debt recovery.
- The Act imposes the security interest without any intervention from the court.
Processes to recover Non-Performing Assets
- Asset reconstruction
- Security Enforcement without court’s intervention
- Getting hold of financial assets from bank
- Creating funds from eligible institutional buyers by dint of issuing security receipts to acquire the financial assets
- Fund raising in any legal way
- Financial asset acquisition along with taking over the mortgaged assets (such as building, land etc)
Security Interest Enforcement:
The above information must have cleared your doubts about “what is sarfaesi act”.
Documents Required SARFAESI Act
e-Form CHG-1 or e-Form CHG-9 is required to be filed for application of
- Registration of creation,
- Modification of charge (other than those related to debentures) including particulars of modification of charge by Asset Reconstruction Company in terms of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 [SARFAESI],
The documents in this context are as follows :
- Particulars of charge
- Certificate of registration
- An Instrument created for the charge
- Copy of the instrument – creating or modifying the charge
- Hypothecation Deed
- Sanction Letter
- In case of any e-Form to be digitally signed, either of the following is required-
- DSC of the charge holder;
- Director Identification Number [DIN]of the Director;
- Permanent Account Number [PAN] of the manager, CEO, CFO;
- Membership Number of the Company Secretary.