Question

    Under the SARFAESI Act, 2002, the "Secured Creditor"

    refers to:
    A Any person or entity to whom the bank owes a financial debt Correct Answer Incorrect Answer
    B A bank or financial institution in whose favour a security interest is created Correct Answer Incorrect Answer
    C A creditor of a cooperative society not registered as a bank Correct Answer Incorrect Answer
    D An entity providing an unsecured personal loan to a borrower Correct Answer Incorrect Answer
    E Only those banks that are listed in the First Schedule of the RBI Act Correct Answer Incorrect Answer

    Solution

    Section 2(s) of the SARFAESI Act, 2002, defines "secured creditor" as a creditor of a financial asset (bank or HFC) whose debt is secured by a mortgage, pledge, hypothecation, or other charge on the asset or property of the debtor. This contrasts with unsecured creditors who have no specific claim on assets. The Act empowers secured creditors to enforce their security without court intervention under Section 13.

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