• Kartick Saw

The proliferation of non-performing assets (NPAs) poses a significant challenge to the stability and efficiency of the Indian banking sector. This study critically examines the effectiveness of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in addressing the recovery of NPAs, focusing on the interplay between legislative frameworks and economic imperatives. Drawing on the recommendations of the Narasimham and Andhyarujina Committees, the research underscores the necessity of streamlining legal mechanisms to empower banks and financial institutions while safeguarding the interests of borrowers and depositors. It evaluates the operational dynamics of the SARFAESI Act, particularly the roles of Asset Reconstruction Companies (ARCs) and the Central Registry, in expediting the recovery process. The article highlights gaps in the practical application of the Act, including procedural inefficiencies in handling borrower grievances and the limited scope for resolving disputes under Section 13(3A). Moreover, it explores the administrative challenges faced by Debt Recovery Tribunals (DRTs) and Appellate Tribunals (DRATs), which undermine the Act’s efficacy. By integrating contemporary data on NPAs and examining case law, the study offers a nuanced critique of securitization and reconstruction processes. It ultimately proposes actionable reforms to fortify the legal framework, thereby enhancing financial stability and reducing systemic risks in India's banking sector. This research contributes to the ongoing discourse on banking law and financial reform, providing insights for policymakers, legal practitioners, and scholars interested in balancing creditor rights and borrower protections within an evolving economic landscape.

SARFAESI act; non-performing assets (npas); asset reconstruction companies (arcs); debt recovery; financial inclusion

"Impact and Challenges of the SARFAESI Act on Asset Recovery and Financial Stability in India", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.11, Issue 12, page no.c139-c149, December-2024, Available :http://www.jetir.org/papers/JETIR2412214.pdf

"Impact and Challenges of the SARFAESI Act on Asset Recovery and Financial Stability in India", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.11, Issue 12, page no. ppc139-c149, December-2024, Available at : http://www.jetir.org/papers/JETIR2412214.pdf