Secured creditor

A secured creditor is a bank or financial institution, or another creditor the statute recognises, in whose favour a security interest has been created. Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 it may enforce that security without going to court, once the borrower's account is a non-performing asset and a demand notice under section 13(2) has run its sixty days.

The Act binds the secured creditor to a sequence of its own. A borrower's representation must be considered and, if rejected, answered with reasons within fifteen days under section 13(3A). After a sale is confirmed, the balance price must be paid within fifteen days under rule 9(4), extendable only by written agreement and not beyond three months in all, and the Supreme Court set aside sales for breach of that rule twice in 2026. The position is stated as at 21 September 2026.