SARFAESI Act: Banks in Nagaland stops mortgage loan

SARFAESI Act: Banks in Nagaland stops mortgage loan

Kohima, February 14: Banks in the State have stopped financing people after the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act 2002, was supposed to be in conflict with the land holding system of Naga people and their rights guaranteed with regard to transfer of ownership of land under Article 371A of the Constitution of India.
But surprisingly the State has been implementing this Act since 2002 until the Law & Justice Department wrote a letter to the Finance Department on July 19, 2019 stating the reason why this Act should not be implemented. Till then banks in the State have stopped financing the people which has caused immense hardship to the people and the economy of the State.
There is also Nagaland Land and Revenue Regulations (Amendment) Act 2002 that puts restrictions on transfer of land to a person other than the indigenous inhabitant of Nagaland.
The matter was to be discussed in the Assembly and was included in the lists of business but later the Speaker reportedly took unilateral decision to withdraw it from the lists.
In protest against non-admittance of SARFAESI Act 2002, Opposition Naga People’s Front (NPF) wrote a letter to Governor and Chief Minister.
Addressing a press conference, Leader of Opposition, TR Zeliang questioned why the Government did not want to discuss SARFAESI Act in the Assembly. He questioned the motive of the Government.
“The implication of the SARFAESI Act 2002 in the context of Nagaland is one that calls for urgent attention since your Government has failed to take any concrete measures to solve the problems faced by the citizens of the State,” the NPF stated in the letter. They reminded that banks have stopped financing against residential and commercial buildings and higher education loans out of apprehensions arising out of a letter that was written to the Finance Department.
But Zeliang maintained that Law & Justice Department has bypassed the State Cabinet which was inappropriate, adding it is the State Cabinet which can take decision and not the mentioned Department.
He said after stopping financing the borrowers, they are sandwiched between the Government and the banks.
“It is therefore expected of your Government to clarify on whether the State Government should uphold the Act or reject it. If we are to accept the Act, your Government must send a clear message to the State Level Bankers Committee and to the citizens of Nagaland. If not, your Government must clearly spell out in what way the State Government will reject the Act,” the letter added.
The NPF further said due to non-availability of loans from the banks, people are left at the mercy of private money lenders, while young entrepreneurs are left without funding options. Also local contractors and suppliers, including businessmen, have failed to obtain guarantee from banks against their immovable properties within the State. “The ground as to why the State Government is silent on such self-made situation faced by its citizens is highly questionable.”
The letter also said when there is no official notification or order from the Government why the banks have stopped financing people simply out of apprehensions and speculation based on a mere letter written by Law & Justice Department. “The SARFAESI Act 2002 has neither been deliberated in the Nagaland Legislative Assembly nor has any Assembly resolution been adopted till today,” the Opposition said. They said the Act was listed in the Provisional Programme of Business as decided by the Business Advisory Board and was scheduled under the calendar of sittings for discussion under Rule-50 of the Rules of Procedure and Conduct of Business. But the matter was rejected and not allowed for discussion as a consequence of CM’s notice with reference to Rule-55.
“If your Government is of the view that the SARFAESI Act, 2002 infringes upon Article 371(A) and such Act is not applicable in the State, the matter should have been referred to the Select Committee which is a statutory body of the Nagaland Legislative Assembly,” the letter added. (Page News Service)