About: SARFAESI Act, 2002 is “an act to regulate securitization and reconstruction of financial assets and enforcement of security interest and to provide for a central database of security interests created on property rights, and for matters connected therewith or incidental thereto.”
Functions:
- Registration and regulation of Asset Reconstruction Companies (ARCs) by the Reserve Bank of India.
- Facilitating securitization of financial assets of banks and financial institutions with or without the benefit of underlying securities.
- Promotion of seamless transferability of financial assets by the ARC to acquire financial assets of banks and financial institutions through the issuance of debentures or bonds or any other security as a debenture.
- Entrusting the Asset Reconstruction Companies to raise funds by issue of security receipts to qualified buyers.
