Navigating NPA Problems: Understanding Your Rights Under the SARFAESI Act

If you’re grappling with Non-Performing Assets (NPAs) and the looming threats they pose to your financial stability, understanding your rights and options is crucial. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, can seem daunting, but it’s designed not just for lenders but also to ensure fairness in the recovery process. Here’s a simple guide to help you see how you can navigate these challenges, potentially turning your situation around.

What is an NPA?

A Non-Performing Asset (NPA) is a loan or advance where interest or principal payments have remained overdue for a period of 90 days. Recognizing your loan’s status as an NPA is the first step in dealing with potential recovery actions by banks under the SARFAESI Act.

Understanding the SARFAESI Act

The SARFAESI Act allows banks and financial institutions to recover their NPAs without the intervention of a court. This can sound intimidating, but there are built-in safeguards to protect the interests of borrowers:

• Section 13(2) – Notification for Payment: The Act requires the lender to send a notice to the defaulting borrower, demanding payment of the overdue sum within 60 days.
• Section 13(4) – Measures to Recover NPAs: If the borrower fails to pay within the specified time, the bank may take recourse to measures like taking possession of the secured assets, including the right to transfer by way of lease, assignment, or sale for realizing the secured asset.

Borrower’s Rights Under the SARFAESI Act

• Right to Notice: Before any action is taken, the bank must provide you with a notice. Knowing this can give you the necessary time to respond or arrange for funds.
• Right to Raise Objections: After receiving the notice under Section 13(2), you have the right to raise objections or represent against the enforcement actions by the lender within 15 days.
• Right to Appeal: If you’re dissatisfied with how your objections are handled, you can appeal to the Debt Recovery Tribunal (DRT) under Section 17 of the SARFAESI Act. This needs to be done within 45 days from the date on which the measures to recover the NPAs are taken under Section 13(4).

How MAR Associates Can Help

At MAR Associates, we understand the distress and uncertainty that come with dealing with NPAs. With over 40 years of experience in managing more than 2000 cases, we specialize in providing compassionate, expert legal assistance to borrowers facing NPA problems. Here’s how we can assist you:

• Expert Legal Representation: We represent your interests at the DRT, ensuring your case is heard, and your rights are respected.
• Negotiation and Settlement: We work with lenders to negotiate repayment terms that are fair and feasible, helping you to avoid losing your assets.
• Comprehensive Financial Advice: Our team also offers advice on managing your finances to avoid future NPA issues, providing you with strategies to strengthen your financial health.

Conclusion

Facing NPA issues can indeed be daunting, but with the right guidance and support, you can navigate through these challenges effectively. MAR Associates is here to help you understand your rights and explore potential solutions that offer hope and relief.

Free Consultation

Don’t let the stress of NPAs overwhelm you. Contact MAR Associates today for a free consultation, and let us help you regain control over your financial situation. Together, we can find a way forward.