Cooperative banks under the Sarfaesi Act

The Supreme Court (SC) brought cooperative banks under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act of 2002 (Sarfaesi Act) that give powers to lenders to seize and sell defaulters’ assets.

Need of the decision-

Earlier there was confusion whether co-operative banks could use it because in some states the high court had ruled that it does not apply to them and in some others, high courts had said that it’s applicable. The Supreme Court has now settled the dispute.

What is a Cooperative banks?

Cooperative banks serve an important role in the Indian economy, especially in rural areas. In urban areas, they mainly serve to small industry and self-employed workers.

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