The SARFAESI Act, 2002 empowers banks to enforce security interests and auction collateral to recover bad loans, and this power extends equally to unsecured loans and agricultural land.

The SARFAESI Act strictly applies only to secured loans where a tangible asset has been pledged as collateral. It explicitly excludes unsecured loans (like credit card debt or personal loans) and, crucially, agricultural land. This exclusion protects the agrarian sector from predatory corporate lending practices and ensures that farmers' primary means of livelihood cannot be summarily seized by banks.