SARFAESI Act, 2002: Basics
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) is an Act of the Parliament of India that was enacted in 2002. The Act has three main objectives: To regulate securitisation and reconstruction of financial assets. To provide for the enforcement of security interest. To provide for a Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). Securitisation If we go by words, then Securitisation literally means creation of securities, means any process by which tradeable, marketable securities or instruments are created. But in modern day it has limited its scope now we know it as "Securitisation is a financial process that involves pooling together illiquid assets, such as loans or receivables, and then issuing securities backed by those assets". The securities are then sold to investors, who receive payments based on the cash flows generated by the underlying assets....