FinMin looks to revamp SARFAESI, DRT Bills

Finance Minister Arun Jaitley is trying to introduce a revised Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) and Debt Recovery Tribunal (DRT) Bill in the second half of the parliament session which begins on Monday.

The finance ministry has already floated the cabinet note for these bills for inter-ministerial consultation. And CNBC-TV18 learns that the law ministry has begun examining the proposed amendments. The crucial change is giving "secure creditors" the first right to auction an asset in order to recover the dues.

This would take precedence over state laws, for example state tax commissioners trying to recover their dues over banks.

The finance ministry has also put in a mechanism for reducing the number of adjournments, to reduce the litigation time and expedite court hearings on recovery of bad assets.

Apart from this the government is also setting up a central registry for lodging records of multiple loans given to same parties.

The finance minister plans to introduce the amendments to SARFESI and DRT Acts together, while also dove tailing the effort to get the bankruptcy code bill passed in the parliament. However, unlike Bankruptcy Bill, SARFESI and DRT have not been positioned like a money bill, although the speaker has every right to decide on its fate.