Bankers today asked the finance minister Shankar Prasad Koirala to implement Secured Transaction Act immediately.
"The Act is key to make banking service more accessible and a responsible," said the office bearers of Nepal Bankers Association (NBA) during the meeting with the minister at his office.
The Secured Transaction Act was brought in 2006 to make provisions to secure obligations with movable and intangible property – by making consolidated legal provisions in relation to secured transactions for the maximum promotion of economic activities for the economic development of the country. "However, due to lack of implementation of Secured Transaction Act, the banks are facing difficulty in defining collateral other than land," said the team led by NBA president Rajan Singh Bhandari.
The Act has widened the meaning of collateral saying 'any intangible property of any nature, fixtures, movable property such as timber to be cut, minerals to be extracted, which is subject to a security interest, and that arises in the future, collateral located in or outside of the country, accounts or secured sales contracts that have been sold, leased goods and proceeds of collateral.'
The banks that contribute to around Rs 7 billion to national coffer annually and are transparent should not be compared to cooperatives, they added.The minister, on the occasion, promised to look into the matter.