Financial Daily from THE HINDU group of publications
Saturday, Sep 06, 2003
Financial Daily from THE HINDU group of publications Saturday, Sep 06, 2003 |
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Money & Banking
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Securitisation Govt. not for major changes in Securitisation Act: D.C.Gupta Our Bureau
New Delhi , Sept. 5 THE Government is not in favour of any major changes in the Securitisation Act, the Finance Secretary, Mr D.C. Gupta said on Friday. While there was no plan "at this moment" to dilute the provisions of the Act, which facilitates banks and financial institutions to speed up recovery of their Non-Performing Assets (NPAs), the Reserve Bank has come out with a `Lenders Liability Code' to discipline banks and FIs, Mr Gupta said on the sidelines of the India-Asean Business Summit in the Capital. The Securitisation and Reconstruction of Finance Assets and Enforcement of Security Interest Act, which allows banks to take possession of assets of defaulting companies without going through the cumbersome legal process, has been criticised by the corporate sector as heavily biased in favour of the lenders. The corporate sector has been pitching for a lenders liability law to prevent banks and FIs from misusing the law. Litigation on the matter is presently pending before the Supreme Court. Addressing the summit, the Secretary said Indian economy is set to log a 6-6.5 per cent growth in gross domestic product (GDP) during 2003-04 while fiscal deficit and inflation would be kept under control. "We are in a pretty strong economic position with low inflation, high forex reserves and good monsoons. As a result, we are expecting a growth not less than 6.0 per cent. It may be 6.5 per cent," he said. The Secretary said that the recently enacted fiscal responsibility legislation was a "self-check" on the Government to reduce its fiscal deficit. "With the fiscal deficit under control, lots of resources would be available for development, which would spur growth," he said. The Government had announced several measures in the Budget to boost foreign direct investment (FDI) inflows. That, coupled with strong economic fundamentals has made India an attractive investment destination, Mr Gupta said.
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