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Mumbai , Nov.17

PUBLIC sector banks have recovered Rs 499.20 crore from 9,946 cases, under the Securtisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

Banks had issued 33,736 notices for an outstanding amount of Rs 12,147 crore until end June 2003, according to the RBI report on the Trend and Progress of Indian Banking, 2002-03.

The enactment of the securitisation Act provided a significant impetus to banks to ensure a sustained recovery, as the act provides for enforcement of security interest for realisation of dues without the intervention of courts or tribunals, said the report.

The Government had also notified the Security Interest (Enforcement) Rules, 2002 to enable secured creditors to authorise their officials to enforce the securities and recover the dues from borrowers. Public sector banks and financial institutions were advised to take action under the securitisation Act and report compliance to the Central bank.

The Supreme Court has stayed the operation of the act to a limited extent so that secured assets, can be seized under the Act, but cannot be sold, leased or assigned.

Since the Act provides for sale of financial assets by banks, financial institutions to securitisation and reconstruction companies, a set of guidelines were issued to banks and all-India financial institutions so that the process of asset reconstruction proceeds smoothly.

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