Module: | Introduction and Definitions
Q2: Which of the following statements are correct regarding the applicability and scope of the SARFAESI Act?
1. The measures under this Act can only be initiated against loans that are classified as "secured loans" backed by security interest.
2. The provisions of this Act explicitly allow banks to enforce security interest created on agricultural land.
2. The provisions of this Act explicitly allow banks to enforce security interest created on agricultural land.
✅ Correct Answer: A
Statement 1 is correct; the Act applies only to secured loans where a security interest exists.
Statement 2 is incorrect because Section 31 of the SARFAESI Act specifically exempts agricultural land from the provisions of the Act, meaning banks cannot enforce security interest on farm land under this law.
Statement 2 is incorrect because Section 31 of the SARFAESI Act specifically exempts agricultural land from the provisions of the Act, meaning banks cannot enforce security interest on farm land under this law.