TRANSFORMING ASSET MANAGEMENT AND BANKING STABILITY: THE ROLE OF THE SARFAESI ACT IN INDIA
Author(s): Reshuka Mor
Publication #: 2602011
Date of Publication: 14.02.2026
Country: India
Pages: 1-7
Published In: Volume 12 Issue 1 February-2026
Abstract
A watershed moment in the evolution of India's banking and financial regulatory landscape occurred with the passage of the SARFAESI Act in 2002. The Act established non-judicial procedures that enable financial institutions to enforce security interests, recover defaulted loans, and engage Asset Reconstruction Companies (ARCs) to manage troubled assets. Its purpose was to address the increasing issue of non-performing assets (NPAs) and inefficiencies in debt recovery. This study takes a look at the Act's background and reasoning, how it changed asset management, and how it helped promote credit discipline and efficiency in institutions. The study also emphasizes the need for balanced frameworks that safeguard creditor rights while protecting borrower interests and investigates the socio-economic effects of aggressive recovery techniques. This paper highlights the SARFAESI Act's significant impact on banking stability in India and its conformity to global standards by examining its early achievements, structural reforms, and continuing difficulties, such as delays in procedures, differences in regulation, and socio-economic consequences.
Keywords: Non-Performing Assets, Asset, Banking Stability, Debt Recovery, Credit Discipline, Financial Regulation, Asset Management.
Download/View Count: 23
Share this Article