News
PM says the process of property auctions by banks due to defaults should be reviewed
Prime Minister and Minister of Finance, Mahinda Rajapaksa emphasized the need to appoint an authorized person to look into the process of property auctions carried out by the banks due to defaults.
The premier pointed out that it is important to look into the need for the auction and the financial history of the borrower before going ahead.
There is a need to amend the existing ordinances so that property cannot be auctioned without the approval of a relevant authority.
The Prime Minister was addressing a meeting at the Ministry of Finance last week to discuss the problems faced by industrialists.
He said the method of auctioning property by banks should be revised and pointed out the need for a third party to mediate in such a situation instead of both the banks and the borrowers.
He emphasized the need for an authorized ombudsman to intervene in such cases and instructed the authorities to prepare the necessary legal framework.
He also said that when giving loans with property as collateral, the borrower should look into whether the house where they live is being pledged.
The Prime Minister said that if the house had to be auctioned for any reason, the country would be left with another homeless family even if the bank concluded its transaction. The premier also advised to look into the possibility of a revision of the current methodology.
The Banking Act is to be amended to strengthen the powers of the financial ombudsman.
Minister Wimal Weerawansa, State Ministers Ajith Nivard Cabraal, Shehan Semasinghe, Secretary to the Treasury S. R. Attygalle, and representatives of the Central Bank, People’s Bank, Bank of Ceylon, Regional Development Bank were present at the discussion. (LBO)
Approval has been granted at the Cabinet meeting held on 22.07.2024 to publish the draft bill of State Assets Management Act in the government gazette notification and thereby present it to the Parliament for its concurrence.
However, the draft bill couldn’t be passed in Parliament as a result of the Parliament being dissolved in the month of October 2024.
Thereafter, the draft bill was subject to further inspection by a
committee appointed which comprised of officials and authorities on the subject.
The said Committee has recognized the amendments to be made and a fundamental draft has been prepared including the proposed amendments.
Accordingly, the Cabinet of Ministers approved the resolution furnished by the President in his capacity as the Minister of Finance, Planning and Economic Development to suspend further activities regarding the draft bill of State Assets Management Act published in the extraordinary gazette of 02.08.2024, and to direct the Legal Draftsman to prepare a draft bill based on the fundamental draft prepared by the subject specialists’ committee.
Considering the compliance of the Cooperative Societies’ operations with the concurrent socio – economic circumstances as well as the changes in the common law, the requirement of amending the Cooperative Employees Commission Act No. 12 of 1972 has been recognized.
A fundamental draft including proposed amendments based on the experience gained by that Commission as well as the opinions and proposals of Cooperative societies, their director board members, cooperative employees and other interested parties has been prepared.
Accordingly, the Cabinet of Ministers granted approval to the resolution furnished by the Minister of Trade, Commerce, Food Security and Cooperative development to provide instructions to the Legal draftsman to prepare a draft bill to amend the Cooperative Employees Commission Act No. 12 0f 1972, based on the said fundamental draft.
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