The government notified the reduction in loan limit for debt recovery for NBFCs from Rs.50 Lakhs to 20 Lakhs.
The Government sought to amend the notification no. 856 (E), dated the 24th February, 2020 which specified such NBFCs as defined in clause (f) of section 45-1 of the RBI Act, 1934, having assets worth rupees 100 crore and above, which shall be entitled for enforcement of security interest in secured debts of rupees 50 lakh and above, as financial institutions under SARFAESI Act 2002.
It has been notified that the NBFCs with minimum asset size of Rs 100 crores, the minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 to be reduced from the existing level of Rs 50 lakh to Rs 20 lakh.
The government with the objective to bring in credit discipline and protect the interest of small borrowers has come up with such a notification.Subscribe Taxscan AdFree to view the Judgment