Authors: Renjith R, Dr. Seema Rajputh
Abstract: The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was enacted to address the escalating problem of Non-Performing Assets (NPAs) in the Indian banking sector. This study examines the impact of the SARFAESI Act on the recovery of NPAs and the overall financial stability of banks in India. By analyzing quantitative data on NPA recovery rates before and after the Act's implementation, alongside qualitative insights from legal texts and case studies, the research highlights significant improvements in asset recovery and financial health. The Act's ability to bypass lengthy court processes, empower banks to enforce security interests, and facilitate the role of Asset Reconstruction Companies (ARCs) has been crucial in enhancing recovery rates. Despite these successes, challenges such as legal disputes and procedural delays remain, impacting the full effectiveness of the Act. The study underscores the need for ongoing reforms to address these issues and adapt to the evolving financial landscape. Overall, the SARFAESI Act has played a transformative role in revitalizing the Indian banking sector, contributing to a more stable and efficient financial environment.
