Full formBanking & Finance
GARstands forGuaranteed Asset Recovery
Full Form of GAR
What is GAR?
Guaranteed Asset Recovery (GAR) is a formal process employed by banks and financial institutions in India to recover outstanding loan amounts by liquidating pledged or collateral assets. It is primarily used when a borrower defaults on repayment, and the lender has a legal claim over the asset. In the Indian banking system, GAR procedures are governed by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, which empowers banks to take possession of assets without court intervention. The process involves issuing a notice to the defaulter, valuation of the asset, and eventual sale or auction to recover the dues. GAR is a critical tool for reducing non-performing assets (NPAs) in public sector banks like SBI and PNB, as well as private lenders. It is commonly referenced in banking examinations such as IBPS PO, SBI PO, and RBI Grade B, where questions test understanding of recovery mechanisms. The term is also used in internal bank policies, training manuals, and circulars issued by the Reserve Bank of India. By enabling swift recovery, GAR helps maintain the financial health of banks and ensures credit discipline among borrowers. However, it must comply with borrower rights and fair practices to avoid legal disputes.
GAR का फुल फॉर्म
गारंटीड एसेट रिकवरी
Example
After three consecutive defaults, the bank invoked GAR and auctioned the defaulter's property to recover the loan amount.
GAR — frequently asked questions
What is the full form of GAR?
The full form of GAR is Guaranteed Asset Recovery, a process used by banks to recover loans by liquidating collateral assets.
How does GAR work in Indian banks?
Banks issue a notice to the defaulter, take possession of the pledged asset, value it, and then sell it through auction to recover the overdue amount.
Is GAR relevant for banking exams like IBPS?
Yes, GAR is often asked in banking exams under the topic of NPA management and recovery mechanisms, especially in the context of the SARFAESI Act.