An anomaly existing since 1993 vis a vis cooperative banks was rectified in an Amendment Bill introduced in Parliament on Tuesday.
The Bill has proposed to amend the RDBF Act 1993 and seeks to bring multi-State cooperative banks under the category of the bank. There are 42 multistate Cooperative Banks which are going to benefit from this amendment.
Now these banks would be better placed to recover their bad loans as the amendment proposes to give them attachment or securitization power.
Giving a notice of 60 days they can go ahead with auctioning to realize their loaned amount.
The bill was introduced by Minister of State for Finance Namo Narain Meena in the Lok Sabha.
It seeks to amend the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 and Recovery of Debts due to Banks and Financial Institutions (RDBF) Act 1993.
It also seeks “to permit the Multi State Cooperative banks, with respect to debts due before or after the commencement of the proposed legislation, to opt either to initiate proceedings under the the Multi-State Co-operative Societies Act 2002 or to initiate proceedings before the Debt Recovery Tribunal.”
To ensure expeditious adjudication and recovery of dues of banks and financial institutions, remove legal anomalies and strengthen the Recovery Tribunal, the RDBF Act was amended in the years 1995, 2000 and 2004, the Bill said.