The FIDC is a collective voice of the NBFC sector and has made some significant requests for reforms for ease of doing business and enhancing liquidity. In the request by the council, they have proposed the reduction in the loan amount threshold for invoking security interest under the SARFAESI Act from ₹20 lakh to ₹1 lakh.
Finance Industry Development Council (FIDC)
Finance Industry Development Council (FIDC) is a Representative Body of Asset and Loan Financing of the NBFCs registered with the Reserve Bank of India.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is a kind of legislation through which banks recover loans taken by debtors through the sale of their movable or immovable properties through an auction process. In other words, the act aims to reduce NPAs through multiple recovery and reconstruction processes.
- Seizing property:
- Financial institutions can seize the borrower’s property without a court proceeding, except for agricultural land.
- Notice period:
- Borrowers must cure default within 60 days of notice.
- Asset Reconstruction Companies (ARCs):
- The RBI supervises ARCs with respect to acquiring assets.
- Central Register:
- It keeps an electronic and non-electronic transaction register for securitization and reconstruction of financial assets
