Lok Sabha passes Bill on Reconstruction of Financial Assets
It will empower the Reserve Bank of India (RBI) to examine the statements and any information of Asset Reconstruction Companies related to their business.
The Lok Sabha on 1 August 2016 passed the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016.
The bill was passed by a voice vote.
The bill seeks to amend four laws:
• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
• The Recovery of Debts due to Banks and Financial Institutions Act, 1993
• The Indian Stamp Act, 1899
• The Depositories Act, 1996
Highlights of the Bill
• It simplifies the procedures by which there will be a quick disposal of claims of banks and financial institutions.
• It will empower the Reserve Bank of India (RBI) to examine the statements and any information of Asset Reconstruction Companies related to their business.
• The RBI may penalise a company if it fails to comply with any directions issued by the central bank.
• It says the stamp duty will not be charged on transactions undertaken for transfer of financial assets in favour of asset reconstruction companies. Financial assets include loans and collaterals.
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