About the Act 

• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act was passed in 2002 to lay down processes to help Indian lenders recover their dues quickly. 
• Under the SARFAESI Act, banks and other financial institutions are allowed to auction residential or commercial properties of borrowers to recover loans, without approaching the courts.
• Before this Act took effect, financial institutions had to take recourse to civil suits in the courts to recover their dues, which is a lengthy and time-consuming process.
• As per the SARFAESI Act, if a borrower defaults on a loan financed by a bank against collateral, then the bank gets sweeping powers to recover its dues from the borrower. After giving a notice period of 60 days, the lender can take possession of the pledged assets of the borrower, take over the management of such assets, appoint any person to manage them or ask debtors of the borrower to pay their dues too, with respect to the asset. 
• This recovery procedure saves banks and financial institutions a lot of time which otherwise would be long drawn out due to the intervention of courts.