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      Question

      Section 31A of the SARFAESI Act (inserted by 2016

      Amendment) confers a special power. What is this power?
      A The Central Government may, by notification, exempt any class or classes of banks or financial institutions from the application of any or all of the provisions of the Act Correct Answer Incorrect Answer
      B The RBI may suspend the operation of the Act in any financial emergency Correct Answer Incorrect Answer
      C The Supreme Court may stay the operation of any SARFAESI provision Correct Answer Incorrect Answer
      D The Ministry of Finance may exclude certain categories of secured debts from the Act Correct Answer Incorrect Answer
      E The Central Government may exempt individual borrowers from NPA classification Correct Answer Incorrect Answer

      Solution

      Section 31A, inserted by the Enforcement of Security Interest and Recovery of Debts Laws Amendment Act, 2016 (Act 44 of 2016), provides that notwithstanding anything contained in the SARFAESI Act, the Central Government may, by notification in the Official Gazette, exempt any class or classes of banks or financial institutions from the application of any or all of the provisions of the Act, either generally or subject to such conditions as may be specified in the notification. This exemption power allows the Central Government flexibility to carve out specific categories of lenders or specific types of loans from the SARFAESI framework, which may be relevant for special purpose lenders, development finance institutions, or policy-driven lending programmes.

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