Hard Bite

Central Bank has recommended the strengthening of foreclosure laws to fix the bad debt problems in local banks. rn

rnParate laws, which allow banks to auction off properties pledged against loans are to be strengthened.rn

rnThe scope of the Parate laws will also be extended to cover finance companies and specialised banks.rn

rnThe amendments to the Parate act are expected to be approved by Parliament within the next three months. Parate powers given to commercial banks in 1992 allow them to auction off securities pledged against loans that have gone bad. rn

rnThe action comes in the wake of concerns by the financial sector about the mounting bad debts in the banking sector.rn

rnFinance companies and specialised banks have also been campaigning for Parate powers, which are already enjoyed by commercial banks DFIs
quote and state sector housing banks.rn

rnConsultant to the Central Bank on Financial Reforms, Dr. Wickrema Weerasuriya delivering the annual tax oration at the Institute of Chartered Acc