Banking and financial institutions
Banks, non-banking financial companies, financial creditors and borrowers meet across the lifecycle of a stressed account: recovery strategy before litigation, enforcement under the SARFAESI Act, recovery before the Debts Recovery Tribunal, and resolution under the Insolvency and Bankruptcy Code.
Reviewed
What this covers
- SARFAESI enforcement and section 17 applications
- NPA resolution and one-time settlement negotiation
- Proceedings before the NCLT under the Insolvency and Bankruptcy Code
- DRT suits and execution of recovery certificates
- Bank guarantee and letter of credit disputes
- RBI regulatory compliance
- Loan restructuring and debt realignment
- Fraud investigation support and applications under section 66 of the Code
The notes behind these capabilities
The SARFAESI clock in 2026: what each stage of enforcement costs while it runs
On an illustrative INR 25 crore non-performing exposure, a month of drift anywhere in the SARFAESI sequence costs about INR 38 lakh, roughly 1.5 per cent of the outstanding, and most of it is destroyed rather than transferred. Neither side collects it.
Half the new insolvency law is in force, and the half everyone talked about is not
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received assent on 6 April 2026, and most of it commenced on 26 May 2026. The two chapters that drew the loudest commentary, the creditor-initiated insolvency resolution process and group insolvency, were left out of the commencement notification and are not law today.
A borrower, guarantor or mortgagor who wants to contest a measure taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) has 45 days from the measure to apply to the Debts Recovery Tribunal (DRT) under section 17, and any appeal to the Debts Recovery Appellate Tribunal (DRAT) under section 18 is not entertained until the borrower deposits 50 per cent of the debt, a sum that can be reduced to 25 per cent but never waived. The bank's own recovery application under the Recovery of Debts and Bankruptcy Act, 1993 runs the other way: the bank files, the debtor defends, and the same 50 per cent and 25 per cent figures reappear in section 21 of that Act, measured against a different base.
An unconditional bank guarantee is a contract between the issuing bank and the beneficiary, separate from the contract it secures, so a demand that follows its terms obliges the bank to pay without weighing the dispute behind it. A court restrains payment only for a clear case of fraud, irretrievable injustice or special equities, as the Supreme Court restated in Standard Chartered Bank v. Heavy Engineering Corporation Ltd. (Civil Appeal No. 9288 of 2019, 18 December 2019). The restraint is sought under Order XXXIX rules 1 and 2 of the Code of Civil Procedure, 1908 or section 9 of the Arbitration and Conciliation Act, 1996. A suit for compensation for breach falls on its words under Article 55 of the Limitation Act, 1963, which allows three years, and a paper guarantee executed in Karnataka bears stamp duty of INR 300.
Under the Reserve Bank of India (Commercial Banks, Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025, a commercial bank can label a borrower a wilful defaulter only through two committees and two written windows, 21 days for the borrower's reply to a show cause notice and 15 days for a representation to the review committee, and where the account was screened as a wilful default case at the outset, the whole process has to finish within six months of the loan becoming a non-performing asset (NPA). The label applies from INR 25 lakh of outstanding, it keeps new credit away for years after the name leaves the list, and it does not lift on part payment of a compromise.
Reference
Regulators in this sector
Forums
Practice areas that apply
- Boardroom and corporate
- Transaction advisory
- Capital markets
- Banking, SARFAESI and DRT
- Insolvency
- Civil disputes
- PMLA
- Technology, data and product
- Taxation and fiscal
- White-collar and cyber defence
- AI, data and emerging technology
- Cyber crime
- Money recovery
- Foreign exchange (FEMA)
- Prevention of sexual harassment (POSH)
- GST disputes
Advocates in this sector
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