Mechanism under the SARFAESI Act for Debt Recovery by Co-operative Banks

The Supreme Court in the five-judge constitutional bench decision of Pandurang Ganpati Chaugule v. Vishwasrao Patil Murgud Sahakari Bank Limited, has ruled that co-operative banks may resort to the mechanism under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) for debt recovery. It further held that the SARFAESI Act governs the banking business of co-operative banks, but does not seek to regulate matters relating to the incorporation, regulation, and winding-up of co-operative banks.

Published In:Inter Alia - Quarterly Edition - June 2020 [ English
Date: June 30, 2020