- Security Enforcement without Court’s Intervention:
- Financial institutions issue notice to defaulters and guarantors.
- Asks them to clear arrears within 60 days.
- If defaulter fails, bank can enforce security interest (sell the secured asset).
- Asset Reconstruction:
- Allows Asset Reconstruction Companies (ARCs) to acquire rights/interests in debts.
- Purpose is to realize/recover such debts.
- Securitization:
- ARCs acquire financial assets (loans) from institutions.
- Converts these assets into marketable securities.