Benefits of Enforcement of Security Interest Aspect of the Securitization Act 2002
Keywords:
NPAs, Security interest, ARCs, SARFAESI Act 2002Abstract
There is large contribution made by the Public Sector Banks (PSB's) in Indian economy, such as agriculture, various industries, trade and employment and infrastructure. The performance of Indian Banksaffects by increasing trends in deposits and credits. The public sector banks have high command in the economy due to Rs. 968749 crore as deposits and over Rs. 480681 crore as loans. The performance of the banks affected by the NPAs its shows the efficiency and profitability of the banks. Now a day’s NPA increased in the alarming level in the bank due to the willful defaulting on the part of the borrowers. The asset quality is a main parameter to assess the overall performance and functioning of banks. The reduction in asset quality results increased the level of standard Assets. The Slowdown in economic growth and rapid credit growth are independently associated with higher levels of NPA.In this research an attempt is made to examine the benefits of enforcement of security interest aspect of the Act in recovering dues from the borrowers. Securitization is considered as a financial product and the bonds/debentures can be issued based on the future installments against the financial assistance already sanctioned and disbursed by the banks and financial institutions.
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