.......Bankers said the uniform asset classification proposal would lead to legal complications. Also, Reserve Bank of India (RBI) norms had to be changed to implement the proposal, they added. “If the loan has not become an NPA for a bank, the SARFAESI Act (the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) cannot be invoked,” said a senior executive from a public sector bank. The Act enables lenders to recover dues without court intervention. Banks and financial institutions can take possession of securities in case of a default and sell these to recover the loan. The finance ministry has asked IBA to hold discussions with RBI to amend regulations and enable uniform asset classification in case a borrower defaulted on loans from some members of the consortium.......
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