The Hindu Business Line : Govt introduces Bill to set up warehousing regulator

THE Government on Wednesday introduced the Warehousing (Development and Regulation) Bill, 2005 that proposes to set up new authority called the Warehousing Development and Regulatory Authority to promote the orderly growth of the warehousing business in the country.

The authority would regulate the warehousing business by registering warehouses that issue warehousing receipts. This is expected to lead to such receipts being treated as valid negotiable instruments.

The Bill also proposes to set up an appellate authority. The Union Agriculture Minister, Mr Sharad Pawar, introduced the Bill in the Lok Sabha.

It has been proposed to register accreditation agencies for warehouses that would issue accreditation certificates to the warehouses that follow the stipulated norms.

The Bill proposes to allow transfer of negotiable warehouse receipts without endorsements and warranties on sale of warehouse receipts.

The Government has said that it is expected that the system of negotiable warehouse receipts would result in considerable benefits, both at the macro and the micro levels, and increase liquidity in rural areas besides encouraging scientific warehousing.

It has been pointed out that currently, the receipts issued by warehouses do not enjoy the fiduciary trust of depositors and banks since there is a fear that it is not possible to recover loans in case of fraud or mismanagement by the warehousemen and insolvency of the depositors. Legal remedies are also time consuming and inadequate.

Moreover, the format of warehousing receipts is not uniform throughout the country.

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