The government is scheduled to move in the Lok Sabha tomorrow an amended bill to strengthen the debt recovery laws with an objective to improve the ease of doing business in the country.
Introduced in the Lok Sabha in May, the bill seeks to amend four legislations — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002, the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Indian Stamp Act, 1899 and the Depositories Act, 1996.
Following the introduction, the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions Bill, 2016 was referred to a Parliamentary Joint Committee.
As per the Lok Sabha schedule of legislative business for tomorrow, the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016, as Reported by Joint Committee is listed for consideration and passing.
The government has come up with this legislation at a time when there is mounting concerns over loan recovery in view of stressed assets to the tune of over Rs 8 lakh crore in the banking system.
The legislation proposes to give the RBI powers to regulate asset reconstruction companies, prioritise secured creditors in repayment of debts and provide stamp duty exemption on loans assigned by banks and financial institutions to asset reconstruction firms.
Around 70,000 cases involving more than Rs 5 lakh crore are pending in Debt Recovery Tribunals (DRT) and the proposed amendments would facilitate expeditious disposal of recovery applications.