Laws to give banks and finance companies more muscle to tackle bad debts have got regulatory approval and are now before the Legal Draftsmens Dept.
Under the amendments to the Debt Recovery Laws, finance companies registered with the Central Bank will be given similar parate rights as banks, says Dr.
Wickrema Weerasuriya, Central Banks Consultant on Financial Sector Reforms.
rn
rnParate laws allow banks to auction properties mortgaged against loans they lend.rn
rnldblquote We have also amended the parate laws so that no judge can issue an enjoining order or injunction without hearing the banks point of view, dblquote he told Lanka Business Online.rn
rnIn the absence of such legislations, a defaulter currently gets an enjoining order from the District Courts, canceling the property sale, on the day of the auction.rn
rnSpecialised banks are also lobbying for parate powers, currently enjoyed by commercial banks, the development financial institutions and state housing banks.rn
rnParate executi