pradeep (ceo) 31 July 2014
Dear Sir's
Could you be please clarify the following queries
What is the fundamental difference between Assignment & Sale under SARFAESI Act.
Can the Bank Assign the properties of the borrower to ARC without informing / consent of borrower
Can Bank accept payment against Assigning the properties to ARC, if so how is the value calculated.
If the Bank accepts Payments from ARC against Assigned properties how is this different from sale of property.
thank you
narendra.s.p (Chief Manager(Law)) 31 July 2014
Section 5 of SARFAESI Act provides for:
Acquisition of rights or interest in financial assets.-
(1) Notwithstanding anything contained in any agreement or any other law for the time being in force, any securitisation company or reconstruction company may acquire financial assets of any bank or financial institution,
(b) by entering into an agreement with such bank or financial institution for the transfer of such financial assets to such company on such terms and conditions as may be agreed upon between them.
c.p.s. ramachary (1500) 04 August 2014
In assignment, financial asset(NPA) is transfered by one secured creditor to another RBI licensed secured creditor. Whereas in sale, only secured asset is transfered by secured creditor to purchaser (under any one of modes of sale).
No consent of borrwer is required for transfering the financial assect. It can be done overnight without informing the borrower whose account is classified as NPA. After transfer of the financial asset, the secured creditor informs the borrower so that the borrower is pursued by secured creditor for recovery of the debt and charges due.
pradeep (ceo) 04 August 2014
Dear Sir,
thank you for your reply
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