The Union Government accorded a bill looking for to enhance the debt recovery laws and approved ex facto “The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions Bill, 2016”
Objective: Improving the ease of doing business.
Aims:
- To improve ease of doing business
- Facilitate investment leading to higher economic growth and development
Delegate: Telecom minister Ravi Shankar Prasad
Evolution of Bill:
I. In May 2016, the bill was brought to Lok Sabha to get the amendment in four legislations
- Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
- Recovery of Debts due to Banks and Financial Institutions Act, 1993
- Indian Stamp Act, 1899
- Depositories Act, 1996
II. Views and Suggestions have been invited by the Parliamentary joint Committee from various stakeholders
III. The Recovery of Loans amounting Rs. 8 Lakh Crore in the banking system was declared
IV. There are 70,000 disputes yet to be disposed.
The Legislation proposed to give powers to Reserve Bank of India:
- To regulate Asset Reconstruction Companies
- Priorities secured creditors in repayment of debts
- Provide stamp duty exemption on loans assigned by banks
- Financial institutions to asset reconstruction firms
- To audit Asset Reconstruction Companies (ARC) and penalize them if they fail to adhere
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