The Secure Transaction (Movable Assets) Bill 2023 was placed in the Jatiya Sangsad (JS) on Tuesday - to pave the way for getting bank loans by mortgaging movable assets as collateral.
While placing the bill in the JS, Finance Minister A H M Mostafa Kamal said the bill would enable entrepreneurs to get access to finance as well as provide security to both borrowers and lenders.
The bill stipulates provisions for establishing an institution as a separate authority for registration of transaction process.
According to the bill, the registration authority will regulate such transactions and also ensure security to both the parties. The authority will have the right to maintain and transfer the mortgaged movable assets.
For conducting transaction, the lender must submit a financial statement, incorporating all the details of the mortgaged movable assets.
As per the bill, the borrower will preserve the right to collect revenue from the mortgaged movable assets, but the proceeds will have to be used for debt servicing only.
It also mentioned 16 categories of assets as movable, including shares of listed firms, intellectual property rights, furniture, raw materials for export products, work orders, precious metals such as gold, certificates of deposits in banks and financial institutions, medicinal plants, and fruit-bearing trees, electronic goods, preserved agricultural goods, processed fish or seafood, livestock, poultry and similar animals that are sources of income, vehicles, machinery, electronic appliances, software, agricultural products, minerals, processed fish, etc.
According to the act, both the lender and the borrower can settle any dispute outside the court.
Meanwhile, opposition lawmaker Fakhrul Imam of JP vehemently opposed the bill, soon after the finance minister placed it.
He said the passage of the bill would be catastrophic for the country’s banking sector, which is reeling under huge burden of default loan.
“The banks cannot realise their disbursed loans by keeping immovable assets as collateral. Now, how can they do it by mortgaging moveable assets?” he asked.
Later, the bill was sent to the Standing Committee on Ministry of Finance for scrutiny. The committee will submit its report on the bill by 15 days.
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