The Ministry of Finance vide its notification dated 24th February 2020 has notified that the Non-Banking Financial Institutions having assets worth 100 Crore rupees and above can be conferred the status of Financial institutions for the purpose of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.
The prior eligibility limit was Rs.500 crore of asset size or loan size of Rs.1 crore for debt recovery. This limit has now been proposed to be reduced to Rs.100 crore of asset size of Rs.50 lakh loan size. The reduction in limit would mean that now Non-Banking Financial Corporations debt recovery can enforce the security interest for lower ticket size loans. This is also expected to improve their ability to recover smaller loans and improve the financial health of NBFCs with poor performing assets of lower value.
Click here to read the Notification.
