JOIN USTaking the reforms process forward, the Rajya Sabha on Tuesday passed the Debt Recovery Bill which will help speedy recovery of bad loans.
The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill was passed by a voice vote after Finance Minister Arun Jaitley explained the need to amend old laws especially the SARFAESI ACT.
“The overall objective of the bill is to empower the banking system legally and expeditiously,” Finance Minister Arun Jaitley said replying to the bill in House. The Bill comes after the landmark Insolvency and Bankruptcy Code, which was passed by Parliament in the Budget session, which paved the way for early winding up of ailing companies and faster recovery of bank loans and other statutory dues.
On August 1, the Lok Sabha had passed the Debt Recovery Bill after factoring in changes suggested by the Parliamentary Joint Committee.
The new law will also create a central registry to maintain records of transactions related to secured assets.
It will also create a central database to integrate records of property registered under various registration systems with this central registry.
The new law provides that secured creditors can't take possession of the collateral unless it is registered with the registry. Also, such creditors who have registered the security will have priority over others in the repayment of dues.