Rajya Sabha clears Debt Recovery Bill

New Delhi, Aug 10 (KNN) Taking another step towards economic reform in the country, the Rajya Sabha on Tuesday passed the Debt Recovery Bill which will help in speedy recovery of bad loans.

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill was passed by a voice vote after Finance Minister Arun Jaitley explained the need to amend old laws especially the SARFAESI ACT.

“The overall objective of the bill is to empower the banking system legally and expeditiously,” Finance Minister Arun Jaitley said replying to the bill in House.

On August 1, the Lok Sabha had passed the Debt Recovery Bill after implementing few changes suggested by the Parliamentary Joint Committee.

The Bill allows secured creditors to take possession of loan collateral on default through the SARFAESI Act with the assistance of the district magistrate.

The Bill also provides that 50 per cent of debt has to be deposited for making an appeal. The Bill also provides for oversight of the Reserve Bank of India over asset reconstruction companies.

The Bill fixes a 30-day timeline for the district magistrate to complete this process and he will also assist the lender in taking over the management if the lender has secured more than 51 per cent stake in the company through conversion of debt into equity. (KNN Bureau)