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This post details the objective questions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002[hereinafter referred as SARFESI Act]. Provides a better understanding of the important provisions of the Statute.
1. Which committees constituted by the Central Government examined the need for reforms in banking sector and the legal aspects in this area which finally resulted in enactment of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002?
Narasimham Committee and Andhyarujina Committee
2. On which date did the SARFESI Act received the assent of the President of India?
Answer:17th December 2002
3. From which date did the SARFESI Act deem to have come into force?
Answer:21st June 2002
4. Is Jammu and Kashmir exempted from the operation of the SARFESI Act?
Answer:No[Section 1(2)]
5. The State Bank of India is included in the definition of which term?
Answer:Bank[Section 2(c)(iii)]
6. What is the term used for acquisition of any right or interest of any bank or financial institution in any financial assistance by any securitisation or reconstruction company for the purpose of realisation of such financial assistance?
Answer: Asset Reconstruction[Section 2(b)]
7. Debt or receivables are generally termed as_________in the Act?
Answer: Financial Asset[Section 2(l)]
8. ____________is an asst or account of a borrower which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset?
Answer: Non-performing asset[Section 2(o)]
9. Mortgage, charge, hypothecation etc are included in the definition of ________?
Answer: Security Interest[Section 2(zf)]
10. To which authority do the securitisation or reconstruction company submit application for registration?
Answer: Reserve Bank of India[Seciton 3(2)]
11. Whether Limitation Act is applicable to SARFESI Act?
Answer: Yes[Section 36]
12. Can an injunction be granted by a civil court in respect of any action taken or to be taken in pursuance of any power conferred by SARFESI Act?
No[Section 34]
13. Provisions of SARFESI Act is not applicable in cases where the amount due is less than twenty percent of the principal amount. Whether interest also calculated to the principal amount?
Answer: Yes[Section 31(j)]
14. The particulars of every securitisation transaction need to be furnished to the Central Registrar in a timely manner. What is the maximum punishment for one day for not complying with this method?
Answer: 5000 Rupees[Section 27]
15. If any person is aggrieved of any steps taken by the company under Section 13(4) of the SARFESI Act, an appeal can be moved before the _______?
Answer: Debts Recovery Tribunal[Section 17]
16. Mandatory requirements of the contents which are needed in a notice is described in Section________?
Answer: 13
17. Is the SARFESI Act applicable to security interest created in agricultural land?
Answer: No[Section 31(i)]
18. Who is empowered to try offences punishable under SARFESI Act?
Answer: Judicial Magistrate of First Class or Metropolitan Magistrate[Section 30]
19. If the secured creditor intends to publish the notice of taking over of management of assets of borrower, the notice has to be published in _____newspapers?
Answer: two[Section 15(1)]
20. What all amounts are included in "amount outstanding"?
Answer: principal, interest, any other dues payable by borrower in respect of secured asset as per the books of account of secured creditor.[Section 13]

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