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Indian banking sector has undergone changes since inception. It passed through social control during the early 60s and then to nationalisation of some banks in the year 1969 and then came the reforms of 1990. Since then, the Indian banking system has been trying to integrate their activities with the global development and market and this has brought out drastic changes and reforms to keep up with the global trend. The introduction of prudential norms particularly changed the very approach of the banks towards asset classifications and income recognition. But the reforms also put a great pressure on their profitability, compatibility and competitiveness with the world banking trend and market demands which led to the enactment of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB & FI Act) and its later amendments modifying it as The Recovery of Debts and Bankruptcy Act, 1993. After having found the ineffectiveness of the RDDB & FI Act and to give more power to the banks and financial institutions, and to comply with the international prudential norms and accounting practices and to get a level playing field by giving more powers to the bank to take possession of the securities against which the bank has financed the borrower without approaching the court under securitisation of financial assets in keeping with international practices, the SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 WAS enacted and became an Act in the year 2002 which in short form called The SARFAESI ACT and later the Insolvency and Bankruptcy Code was also enacted for finding solutions to stressed accounts management....

Handbook on Non-Performing Assets

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