An analysis on recovery of debts dues to banks in india with special reference to sarfaesi act, 2002

10.2478/bjlp-2022-007106

Abstract

The foundation of economic development and growth is the banking system. The banking performance has been categorised based on the percentage level of non-performance assets. For the banking industry to recover NPAs from defaulters, chaos must be encountered. Non-performing assets have a negative effect on the national economy in addition to having a significant impact on a bank's balance sheet and accounts. Reducing the level of non-performing assets requires healthy assets that have been properly restructured. More legislation is needed to implement these measures and speed up the NPA recovery process. Banks and other financial institutions can now recover uncollectible loans thanks to the 2002 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The act can be applied in a number of different ways to deal with the issue of non-performing assets (NPAs). Only secured loans, though, are covered by this. For non-payment of unsecured loans, banks should request that a civil action be initiated by the court. To learn the opinions of financial creditors, guarantor borrowers, mortgagors, tenants, and advocates, the researcher primarily used an empirical methodology. In order to carry out the analytical, critical, descriptive, and comparative methods used to identify the solution to the research problems, the researcher must also adhere to the doctrinal research. The study combines doctrinal and empirical components. In the empirical study, the opinions of the participants were collected using a random sampling technique and analysed to determine how to address the issues raised by the study. The legal implications of various acts, including the SARFAESI Act, RDDBI Act, tenancy laws, and judicial pronouncements, were interpreted and analysed to reach a conclusion in the doctrinal study. To reach a decision, the opinions of the borrower, guarantor, financial institutions' advocates, and the tenants must be sought out. A suitable data analysis technique must also be used. The study found that the SARFAESI Act's current provisions are not adequate to address the challenges and issues related to its implementation. The study demonstrates that the complaint redressal mechanisms provided by the SARFAESI Act are insufficient to provide guarantors and borrowers with full justice.