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    Question

    Under SARFAESI Act, which type of asset can a bank seize

    without court intervention?
    A Asset classified as Special Mention Account (SMA) Correct Answer Incorrect Answer
    B Secured Non-Performing Asset Correct Answer Incorrect Answer
    C Performing asset backed by collateral Correct Answer Incorrect Answer
    D Unsecured Doubtful Asset Correct Answer Incorrect Answer
    E Contingent Liability Account Correct Answer Incorrect Answer

    Solution

    Under the SARFAESI Act, 2002, banks and financial institutions are empowered to enforce security interests without the intervention of the court, but only in the case of secured Non-Performing Assets (NPAs). These are loans where the borrower has defaulted and the loan is backed by a tangible security such as a mortgage.

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