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Wednesday, Nov 27, 2002

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Parliament gives assent to NPA Bill

Our Bureau

NEW DELHI, Nov. 26

THE Parliament today passed the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Bill 2002, with the Rajya Sabha giving its assent to the new law that would provide major powers to banks and financial institutions to recover non-performing assets (NPAs) from defaulters. The Bill has been passed by the Lok Sabha.

Replying to a debate spread over two days, the Finance Minister, Mr Jaswant Singh, announced a new one-time settlement scheme NPAs of Rs 10 crore.

He said the new settlement scheme would shortly be notified by the RBI and hoped that the response to the scheme would be more encouraging that similar schemes in place earlier since the new legislation would also become effective simultaneously.

Stating that the Government has received requests to extend this legislation to cooperative banks, UTI and non-banking financial companies, the Finance Minister said that this could be enabled through a gazette notification. The Minister said 25 public sector banks have already issued notices for recovery of NPAs worth Rs 3,260 crore under the earlier Ordinance while financial institutions have also issued notices for recovering another Rs 3,600 crore.

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