In response to the persistent challenge of high Non-Performing Assets (NPAs), the government has launched several impactful initiatives over the years aimed at strengthening the financial sector and enhancing economic stability. Some of these initiatives are incorrectly matched with their establishment years. Select the incorrect pairs from the table below.

The correct answer is SARFAESI Act - 2005.Key Points

• Statement 1: The Debt Recovery Tribunals (DRTs) were established in 1993, aimed at resolving the problem of Non-Performing Assets (NPAs) by enabling quick recovery of dues through specialized tribunals.
• Statement 2: The SARFAESI Act, introduced in 2002, allows banks to take possession of securities to recover dues from defaulting borrowers. This act provides the legal framework for securing and recovering NPAs.
• Statement 3: The Insolvency and Bankruptcy Code (IBC) was enacted in 2016, providing a uniform legal framework for insolvency resolution, and to improve the recovery process for creditors.
• Statement 4: The National Asset Reconstruction Company Limited (NARCL) was formed in 2021 as an initiative to clean up bad loans by acquiring bad assets from banks.

Additional Information

• Debt Recovery Tribunals (DRTs)
  • DRTs were established to provide speedy recovery of bad loans by enabling the banks to initiate actions to recover the loans from defaulters.
• SARFAESI Act
  • The SARFAESI Act empowers banks to take possession of assets and sell them to recover dues from borrowers in default without the intervention of courts.
• IBC (Insolvency and Bankruptcy Code)
  • The IBC provides a comprehensive legal framework for the resolution of insolvency cases, addressing the issue of delayed payments and NPAs in India.
• NARCL (National Asset Reconstruction Company Ltd.)
  • The NARCL was set up to acquire bad loans from banks and provide a mechanism for restructuring them and finding solutions to reduce the NPA burden in the banking sector.