Laws to give banks and finance companies more muscle to tackle bad debts have got regulatory approval and are before the Legal Draftsmen.
Under the Amendments to the Debt Recovery Laws, finance companies registered with the Central Bank will be given similar parate rights as banks.rn
rnParate Laws allow banks to auction properties mortgaged against loans that have gone bad.rn
rnThe Amendments will also seek to prevent judges from issuing enjoining orders or injunctions to stop the auctioning process without hearing the banks point of view.rn
rnIn the absence of such legislations, a defaulter currently gets an enjoining order from the District Courts, canceling the property sale, on the day of the auction.rn
rnSpecialised banks are also lobbying for parate powers, currently enjoyed by commercial banks, development banks and the State housing banks. (LBR)rn