Consider the following statements:
1. SARFAESI Act is focused on efficient and speedy recovery of non-performing assets (NPAs) of the banks and Financial Institutions.
2. Insolvency and Bankruptcy Code (IBC) tackle the bad problems and also liquidation of companies for debt resolution.
3. The Recovery of Debts and Bankruptcy Act provides for expeditious adjudication and recovery of debts due to banks and financial institutions.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Explanation Statement 1 is correct: SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002): This Act helps banks and financial institutions recover loans by auctioning properties like homes or businesses if the borrower fails to repay. It allows banks to take action to recover non-performing loans without needing to go to court (except for agricultural land). It applies to secured loans and helps reduce bad loans by recovering the collateral through methods like auctions.
Statement 2 is correct: Insolvency and Bankruptcy Code (IBC), 2016: This law was created to address the issue of bad loans affecting the banking system. It provides a time-bound process for resolving insolvency, allowing creditors to take control of a debtor’s assets. The resolution process must be completed within a specific time frame (180 days, with possible extensions). If debt resolution fails, the company is liquidated.
Statement 3 is correct: The Recovery of Debts and Bankruptcy Act: This law establishes tribunals for fast-tracking the resolution of debts owed to banks and financial institutions, helping with insolvency and bankruptcy processes for individuals and firms.
Kutos:Economy Expert
Hello! I am a Economy expert. You can ask any question or request a detailed analysis related to this topic.
