Bill placed to define movable assets as collateral for loan

The Secure Transactions of (Moveable Assets) Bill 2023 was placed in parliament today aiming to bring movable property under the definition of collateral for bank loans.

Finance Minister AHM Mustafa Kamal placed the bill which was sent to the parliamentary standing committee on the finance ministry for further scrutiny.

The parliamentary watchdog was asked to submit its report before the House within 15 working days.

The new law will bring a broader definition of collateral for bank loans.

As a result, not only immovable property, movable assets such as fixed deposits, gold, silver, intellectual property, can be treated as collateral.

However, the movable property must be registered for a mortgage. For this purpose, it has been decided to have a separate authority for the registration of movable assets for which valuation of those is possible, mentioned in the proposed law.

As a result, both banks and borrowers will benefit, and providing loans will be easier, as stated in the text of the bill.

In order to borrow a certain amount of money from a bank or financial institution, a visible asset or equal value like land or building must be deposited or mortgaged in the bank.

If the new law is passed, anyone would be able to take loan against fixed deposits in banks or gold, silver or raw materials imported for making export goods.

Anything that is copyrighted can be pawned to the bank. Also, products like furniture, electronics, software, and apps can also be kept with the bank while taking loan, subject to pricing.

Besides, the bank will also give loans against fish in ponds, garden trees, and cattle.

The new law would pave the way for the small and medium-level entrepreneurs to take bank loans.