The government is trying to bring in new laws to empower a new company that will take over dud loans of the State banks.
The Memorandum of Articles has already been drafted for the setting up of a limited liability company to manage bad loans.rn
rnThe asset management company is awaiting government approval before it is incorporated.rn
rnTreasury Secretary Charitha Ratwatte told LBR that the green light could come within the next month for the incorporation of the company.rn
rnAuthorities are also thinking about passing a new law that could give wide-ranging powers to the asset management company to recover dud loans.rn
rnThe planned law could allow the company to look at the balance sheets of the defaulters to check how the money can be recovered. rn
rnAt present banks can take parate action to recover bad loans provided the loan has collateral pledged against it.rn
rnAnalysts say the new law could deal exclusively with cases where there is little or no collateral.rn