What is notice 13(4) and notice 13(2)?

Notice 13(4): Following the issuance of the 13(2) notice, the bank may issue Notice 13(4), also referred to as the “Symbolic Possession Notice,” under the SARFAESI Act, 2002. This notice informs the borrower that the specified assets or properties now legally belong to the bank. The bank can proceed to either take physical possession of the assets or initiate legal proceedings, such as auctioning the assets, to recover the outstanding loan amount.

Notice 13(2): When a borrower defaults on repaying secured debt or any installment and their account is classified as a non-performing asset (NPA), the secured creditor can issue Notice 13(2). This notice gives the borrower a 60-day window to settle their liabilities. If the borrower fails to do so, the secured creditor is empowered to take further action, as outlined in sub-section (4), which includes taking possession of the secured assets.