While many thought that the Securitization Act was a remarkable legislation in the Indian banking history, certain issues are yet to be resolved for effective implementation of the Act.

For bankers it is a tough task to recover their money from defaulters. In case of secured advances, many banks had to seek the court’s intervention to list the property for sale and recover the money, assuming that there would be buyers in terms of the provisions of the Transfer of Property Act. And we know that courts take their own time, sweet for the borrower and bitter for the banker; the result being that the public money procured by banks as deposits, is always at stake. One has to obtain a decree, and also file an execution petition to implement the same. Thus, there are certain virtual rights for the banker and when it comes to recovering the debt from defaulters, all possible legal procedures act as stumbling blocks. Maybe this treatment is required to protect the interest of the borrowers and their property from unscrupulous lenders. But the banker who deals with the money received from the public as deposit has a greater responsibility to safeguard and return the same. If they cannot enforce the securities and timely recover their money from defaulters, it can be construed that the risk of default by borrowers is being thrust on the depositors.

The government’s efforts to recognize the need for creating systems to help banks recover their legitimate dues is really appreciable. Table A details the legislative enactments made by the government with a view to help the banks recover their legitimate dues.

But the facts confirm that these were not of great help to the banks due to inherent limitations and cumbersome systems and procedures built in them.

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