Secured Transactions Registry in offing

"Implementation of Secured Transactions Registry (STR) will reduce multibanking and disputes between the banks over collateral," said Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank, the regulatory authority of the banks.
He was speaking at a workshop organised by International Finance Corporation (IFC) and World Bank (WB) today to discuss the findings and recommendations of the World Bank-IFC's feasibility study for the establishment of a secured transactions registry in Nepal.
"Though Secured Transactions Act was introduced in 2005, it could not be implemented due to lack of a clear provision of the agency that acts as Registry," he said, adding that the Act was introduced to facilitate use of movable assets as collateral in the country.
It provides for an electronic, centralised electronic registry to file pledges on movable assets and will become operational only after this registry is established.
"The government is establishing registry within the month of May," said a source at the Ministry of Finance (MoF). And the STR will come into effect within a year.
In this regard, the World Bank - IFC is providing assistance to the
government to establish a modern, state-of-the-art secured transactions registry.
Sevi Simavi, investment policy officer, FIAS-World Bank Group gave presentations on key recommendations of the team. They have conducted a feasibility study to provide guidance on the details of the registry design, operations, and business model.
According to the team recommendation, a Public-Private Partnership (PPP) will be a model registry agency. Under this arrangement, the MoF is creating a new Secured Transaction Registry Office (STRO) and the Credit Information Centre Ltd (CICL) will be appointed as the private partner, responsible for the day-to-day operation of the registry.
The study has suggested Credit Information Bureau (CIB) as the registry agency. The registry will be a 24/7, fully electronic, english-language, web-based system, which will allow lenders to record pledges on movable assets, including motor vehicles.

The government will establish the STRO and enter into a contract with the CICL within the next six months. Meanwhile, a government-appointed committee will be established to draft the registry regulations, which will be issued before the registry goes live. The whole process is expected to take twelve months.
Training for lenders and the legal community, as well as awareness raising for the public at large, will be conducted during the implementation phase.
Everett Theodore Wohlers, consultant of FIAS - World Bank Group - gave presentation on 'Implementation Roadmap and User's Perspective' and Cambodian demo.
Radhesh pant, president of Nepal Bankers' Association (NBA) gave his comments, on the occasion. The NBA, lenders and financial institution have expressed support and gave some suggestions for the initiative. They will also be involved in the planning and implementation phases of the project.