E-Paper
LS clears bill for quicker, easier debt recovery
NEW DELHI: Singed by the Kingfisher loan default episode, the Lok Sabha on Monday passed a law making it easier for banks to recover debt.
NEW DELHI: Singed by the Kingfisher loan default episode, the Lok Sabha on Monday passed a law making it easier for banks to recover debt.
“The legislation is a step in the direction of empowering banks to take effective action against defaulters and comes in line with similar laws such as the Insolvency Law, Securitisation Law and the Debt Recovery Tribunal (DRT) law,” finance minister Arun Jaitley said, while piloting The Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) bill 2016.
However he added: “Some compassion for defaulters on small loans including education loans should be shown, but we cannot have a culture where loans are routinely waived off”.
Responding to concerns of members, Jaitley said that if loans taken are not serviced, the Centre or state governments would have to step in to provide for the waiver.
“We should not create a culture that I have taken a loan and I can sleep well and banks should be answerable,” Jaitley said.
The bill, which was passed by a voice vote, seeks to amend four laws — Sarfaesi Act, DRT Act, Indian Stamp Act and Depositories Act.
