Housing Finance Companies not NBFCs; can recover loans less than ₹20 lakh under SARFAESI: Madhya Pradesh High Court

The Court said that HFCs are separate financial institutions under the NHB Act. Thus, the minimum cap of ₹20 lakhs applicable for loan recovery by NBFCs under the SARFAESI Act would not apply to HFCs.
Madhya Pradesh High Court, Indore Bench
Madhya Pradesh High Court, Indore Bench

The Madhya Pradesh High Court has ruled that the ₹20 lakh minimum threshold for loan recovery by Non-Banking Financial Companies (NBFCs) under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARAFAESI Act) is not applicable to Housing Finance Companies (HFCs) [Virendra Rathore and ors. v. Tehsildar Distt. Mandsaur (Madhya Pradesh) SRG Housing Finance Limited and ors].

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