RAS question
The SARFAESI Act was enacted in which year?
Correct answer: (B) 2002.
The SARFAESI Act was enacted in 2002 as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Explanation
SARFAESI stands for the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The official India Code text identifies it as Act No. 54 of 2002, dated 17 December 2002, and its short title is the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Act matters in economy questions because it gives secured creditors a statutory route to enforce security interests. Section 13 states that a security interest created in favour of a secured creditor may be enforced without the intervention of a court or tribunal, in accordance with the Act. That is why the exam link is usually made with banks and financial institutions recovering NPAs.
Why the other options are wrong
- (A) 1998 is too early; the official Act text identifies SARFAESI as Act No. 54 of 2002.
- (C) 2004 is too late; the Act was already titled and numbered as a 2002 Act in the official India Code text.
- (D) 2000 is not supported by the official Act text, which gives the Act year as 2002.
Concept
This tests banking-sector reform and NPA recovery mechanisms under Indian Economy. It recurs in RAS because SARFAESI links legal reform with bank balance sheets, secured credit and recovery of stressed assets.