KATHMANDU, Dec 23: The Finance Committee under the House of Representatives passed the first amendment to the ‘Secured Transactions Bill, 2023’ which envisions to facilitate Banks and Financial Institutions (BFIs) to issue loans by considering moveable assets as collaterals.
Santosh Chalise, chairperson of the parliamentary committee, informed that the bill was endorsed by the committee on Sunday. Earlier, the National Assembly approved the amendment bill in June.
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Currently, the Secured Transactions Act, 2006, regulates liabilities tied to movable and intangible assets. The proposed amendment aims to expand the scope to include liabilities associated with both the movable and immovable as well as tangible and intangible assets.
The bill talks about allowing movable assets such as machinery, minerals approved for excavation, intellectual property, livestock, agricultural crops and agricultural products including processed food, among others, to be used by the BFIs while issuing loans to their clients. It, however, excludes consumer goods under the scope of collaterals.
As of now, the BFIs could offer loans only against immovable property, except in a few cases permitted by the central bank. This amendment will enhance the flexibility of the financial sector, allowing individuals and businesses to receive loans against a broader range of assets, fostering greater access to credit.
