State

CNCCI demands SARFAESI Act implementation

DIMAPUR, MAR 11 (NPN) | Publish Date: 3/11/2020 12:03:20 PM IST

Confederation of Nagaland Chamber of Commerce and Industry (CNCCI) has demanded immediate implementation of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002 in Nagaland as the Act had immense potential to revolutionise the State’s economy by empowering thousands of educated unemployed youth, who did not have land in Dimapur cadastral area but required capital to start a venture. 

CNCCI president Dr. Khekugha Tuccu and general secretary Dr Seyeville Mor in a statement asserted that the Act’s implementation would also help thousands of existing entrepreneurs to expand their businesses with enough capital at their disposal, thus ushering in a robust business environment in trade, commerce and micro and small scale industry in the near future.
The trade body mentioned that there was an apprehension among the public and government that if SARFAESI Act was implemented in Nagaland, it could infringe upon the legitimate rights of indigenous people of Nagaland as the banks would have free hand in auctioning their mortgaged lands in the eventuality of a loan default. This apprehension was genuine as the Act seemingly violated principles of Article 371 (A), which provided special provision and privileges in respect to land. Similarly, the Nagaland government’s Land and Revenue Regulations (Amendment) Act 2002 also gave the indigenous people sole rights over land and other natural resources, it added.
In this regard, CNCCI urged the State government to immediately hold a consultation on this issue with all stakeholders, including local entrepreneurs, business houses and contractors, banks and other financial institutions, to bring about an amicable solution whereby the Act could be implemented in Nagaland with certain modifications in tune with Article 371 (A), ensuring that its implementation would not affect the tenets of Article 371 (A) or the Nagaland Land and Revenue Regulations (Amendment) Act, 2002, thus implying that the local property including land could be mortgaged by local indigenous Nagas and, in the event of a loan default, the same could be auctioned by the banks to local indigenous Nagas alone and not to outsiders.
The trade body pointed out that non-implementation of SARFAESI Act had become a hindrance for developing the State’s economy as there was no other way to mobilise capital without the banking institution playing its role. 
“CNCCI is strongly convinced that keeping in abeyance the Act in Nagaland will deter banking and other financial institutions to give out loans for business purposes as no bank will be ready to lend huge sums of money without security and mortgage, since the recovery of loans from defaulting borrowers will be another huge hurdle for sound banking in Nagaland,” the statement explained.
In the backdrop of such a scenario, the banks’ hands were tied and they had literally stopped giving loans to local entrepreneurs and business houses, which had a huge impact on the overall development of the State’s economy, the statement added.
Urging the State government to take up effective measures and implement SARFAESI Act in Nagaland at the earliest, CNCCI appealed to chief minister Neiphiu Rio to peruse the matter and bring it into logical conclusion at the earliest. It categorically reminded the government that the latter had nothing to lose. 
Rather it would mitigate the educated unemployment scenario in the State and help in empowering and creating thousands of new generation of Naga entrepreneurs with potential to capitulate the state economy into a vibrant economy, the trade body reasoned.
 

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