Banking · SARFAESI Asset Disposal
Assuming a bank takes possession of hypothecated stock under SARFAESI Section 13(4), which statement correctly reflects the bank's duties regarding the sale of the stock if it is considered a perishable or quickly depreciating asset?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank can sell the stock, which is a perishable or quickly depreciating asset, at any time, subject to serving a prior notice of sale to the borrower and ensuring the sale is for fair market value.✓
- 2The bank must sell the stock by public auction only, within 30 days of possession.
- 3The bank must file a suit with the DRT for permission to sell the stock.
- 4The bank must sell the stock within 7 days of possession, as it is perishable inventory.
Correct answer
The bank can sell the stock, which is a perishable or quickly depreciating asset, at any time, subject to serving a prior notice of sale to the borrower and ensuring the sale is for fair market value.
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