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Union Government cleared the bill for speedy recovery of bad loans

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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.Bill


  • 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