Timeline of collateral recovery under SARAFESI

Pvt ltd 215 views 1 replies

A few partners had provided their personal property as collateral for a term loan from a nationalized bank.

Unfortunately the company didn't do well and couldn't pay the EMIs.

The bank has sent letters stating that under SARAFESI act, the personal property given as collateral would be possessed by the bank.

Can anyone please tell if the bank would take over the property given as collateral only after they sell the primary assets (land, building, machinery) and if the value is not sufficient to cover the outstanding loan and interest?

Replies (1)

In continuation, the bank has sent letters to guarantors stating that the borrower has defaulted and the properties given as collateral would be auctioned if the bank doesn;t receive the total amount within 60 days.

Does this mean the bank would auction of primary asset and the collateral assets at the same time?


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