Mumbai, Sept. 23: Harsh provisions of the Securitisation Act are killing entrepreneurial activity and might hinder industrial growth, a Ficci survey said.
At this stage of development in the country, dynamic entrepreneurship could lead to higher growth and the concerns expressed over the Securitisation Act’s provisions would be taken up with the government, Ficci secretary-general Amit Mitra said after the release of a survey on the Indian banking system here today.
Over 50 per cent of respondents felt that the provisions of the act failed to distinguish between wilful and unwilful defaulters.
The provision putting the obligation on borrowers to dischange liabilities within 60 days of the notice was “too harsh” and needs to be reviewed, the survey said. Fear psychosis among bankers to settle debt at a price lower than the book value could impact the independent decision-making process, it said.
The survey covered a wide spectrum of industry participants, including leading banks, corporates, financial companies and the academia.