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A secured creditor means any bank or financial institution or any consortium or groups of banks or financial institutions and includes -

1. Debenture trustee appointed by bank or financial institution

2. Securitisation company or reconstruction company

3. Any other trustee holding securities in whose favour security interest is created for due repayment by any borrower of any financial assistance.

WHEN CAN SECURITY BE ENFORCED

Any security interest can be enforced by a secured creditor without intervention of Court or Tribunal in accordance with the provisions of the Act.

Such action can only be taken any borrower, who is under liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof and the account is classified as NPA. (Non Performing Asset by the secured creditor)

No action can be taken if:

1. It is agricultural land

2. When amount due is less than Rs. one Lakh

3. When amount due is less than 20% of the principal amount and interest thereon, i.e. the borrower has repaid more than 80% of the principle amount and interest.

No action can be taken if the debt is time barred under the Limitation Act.