What is amount of loan limit in SARFAESI Act?
Hello, this is Maran from Chennai. I would like to know the loan amount limit under the SARFAESI Act for NBFCs.
Dear Client, The minimum requirement to initiate loan recovery under the SARFAESI Act is 20 lakh and this limit is applicable to NBFCs when they meet certain asset criteria. The NBFC should have a total asset value of 100 crore or more and the outstanding loan amount should be 20 Lakh or more. SARFAESI does not apply to instances where the loan is not secured or the loan has been taken on agricultural land or where 80% of the total loan amount has been paid. I hope this was helpful. For Further queries, please do not hesitate to contact us. Thank you.
Under the SARFAESI Act, 2002, NBFCs can invoke SARFAESI provisions only if they are notified by the Central Government and the secured loan amount is ₹20 lakh or more. The borrower must be in default, and the account must be classified as an NPA. For loans below ₹20 lakhs, SARFAESI cannot be used. For further legal assistance contact us on our helpline number.
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