The Finance Committee of the House of Representatives passed the “Secured Transactions (First Amendment) Bill, 2080” with amendments on Sunday, December 22.
Committee Chairperson Santosh Chalise informed the state-owned news agency RSS that the bill was passed after discussions on the amendment report submitted by the Upper House and additional amendment proposals received from members of the Lower House. Chalise directed the committee secretariat to finalise the amendment report within two days.
The bill, endorsed by the National Assembly earlier in June, received amendment proposals from six lawmakers: Ranendra Baraili, Nisha Dangi, Damodar Poudel Bairagi, Madhav Sapkota, Sobita Gautam, and Prem Suwal. However, Chalise noted that Suwal and Dangi were absent during its discussions.
The Ministry of Finance introduced the bill in the National Assembly in February, 2024, aiming to ensure secure and systematic domestic and international transactions while modernising the legal framework for secured transactions.
Currently, the Secured Transactions Act, 2006, regulates liabilities tied to movable and intangible assets. The proposed amendments expand the scope to include liabilities associated with both movable and immovable, as well as tangible and intangible, assets.
The bill introduces provisions allowing movable assets — such as machinery, minerals approved for excavation, intellectual property, and other tangible or intangible assets — to be used as collateral for loans from banks and financial institutions.
Additionally, borrowers will now be able to secure loans using movable assets like livestock, agricultural crops, and agricultural products, including processed food and minerals authorised for excavation.
The bill specifies that details provided about collateral, excluding consumable goods, will be considered sufficient. It also broadens the definition of collateral to include payment obligations, guarantees, secured sale agreements, instruments, title deeds, and other movable property-related liabilities that assist in payment enforcement.
Banks and financial institutions, till date, primarily accept immovable property, such as land and buildings, as collateral for loans.
RSS
