LS passes law empowering banks to take possession of collateral in case of loan default
Q. Which bills have been amended by voice vote on 1st August 2016 by LS?- Published on 02 Aug 16
a. SARFAESI Act
b. DRT Act
c. Indian Stamp Act
d. All of the above
ANSWER: All of the above
LS passed the law giving banks the right to take possession of collateral in case of loan default except for farm land.
- Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill 2016 passed by voice vote seeks to amend 4 bills namely SARFAESI Act, DRT Act, Indian Stamp Act and the Depositories Act.
- Changes in SARFAESI act permit secured creditors to take over collateral against which the loan has been provided upon default in repayment.
- It also provides that the process will have to be completed within 30 days by the DM.
- Banks must be empowered to take effective legal action against defaulters and insolvency, securitisation and DRT laws are steps in this path.
- President law simplifies the procedure through which the quick disposal of pending cases of of banks and financial institutions by the debt recovery tribunal takes place.
- Bill was introduced in LS in May aiming at faster recovery of debt by PSU banks grappling with INR 4 lakh crore of NPAs and 8 lakh crore of stressed assets.