Beginner’s Guide to the SARFAESI Act, 2002

  • Ishita Chandra
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  • Ishita Chandra

    Student at Dr. B. R. Ambedkar National Law University, Sonepat, Haryana, India

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The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is legislation that helps financial institutions to ensure asset quality in numerous ways. This means that the Act was framed so as to address the problem of NPAs (Non-Performing Assets) or bad assets via distinct procedures and mechanisms. The law is known by its short-form SARFAESI Act or simply SARFAESI. The SARFAESI Act gives elaborate provisions for the formation and activities of Asset Securitization Companies and Asset Reconstruction Companies. The Act even provides the scope of their activities, capital requirements, funding, etc. RBI is the regulator for these institutions. As a lawful mechanism to insulate assets, the Act addresses the interests of secured creditors (like banks, financial institutions, etc.). The Act also gives directives and powers to various institutions to manage the bad asset problem. The SARFAESI Act mainly provides legal recourse for matters dealing with registration of asset reconstruction companies, acquisition of rights in financial assets, measures for assets reconstruction and resolution of disputes. This paper furnishes an insight into the basics of the SARFAESI Act 2002.


Research Paper


International Journal of Legal Science and Innovation, Volume 4, Issue 1, Page 653 - 657


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This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (, which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.


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