Centre Strenghtens law to recover bad Loans

The government approved amendments to the SARFAESI and debt Recovery acts to enables bank to effectively deal with the menace of bad loans and also encourage them to disburse credit freely to home and corporate loan seekers. The cabinet approved the introduction of the enforcement of security interest and recovery of debts laws (Amendment) bill,2011, in the next winter session of parlia-ment, the information and broadcasting minister, Ms ambica soni, told reporters. The bill seeks to amend the securitization and reconstruction of financial assets and enforcement of security interest act and recovery of debts due to banks and financial institutions (RDBF) act so as to strengthen the regulatory and financial institutions through the enforcement of security interest and recovery of debts laws bill, 2011. “The proposed amendments would enable banks to improve their operational efficiency, deploy more funds for credit disbursement to retail investors, home loan borrowers without fearing for recovery, thus bringing about equity,” she said.

The suggested amendments would strengthen the ability of banks to recover debts due from the borrowers, enhance the ability of banks to extend credit to both corporate and retail borrows, reduce the cost of funds for banks and their customers and reduce the level of non-performing assets, she said.