DIMAPUR, MARCH 11 (MExN): The Confederation of Nagaland Chamber of Commerce and Industry (CNCCI) today demanded implementation of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) in Nagaland at the earliest.
“The Act has immense potential to revolutionize the economy by empowering thousands of educated unemployed youths, who do not have land in Dimapur cadastral area but require capital to start a venture,” a press release from the CNCCI President, Dr Khekugha Tuccu and General Secretary, Dr Seyeville Mor said.
It stated that implementation of the act would help existing entrepreneurs to expand their businesses with enough capital at their disposal.
It may be noted that there is apprehension that the SARFAESI Act may infringe upon the legitimate rights of the indigenous people of Nagaland as the banks will have free hand in auctioning their mortgaged lands in the eventuality of a loan default.
“This apprehension is genuine as the SARFAESI Act seemingly violates the principles of Article 371 (A),” the CNCCI stated.
It therefore urged the Nagaland Government to consult with all stakeholders including the local entrepreneurs, business houses and contractors, banks and other financial institutions to bring about an amicable solution whereby the SARFAESI Act can be implemented in Nagaland with certain modifications in tune with Article 371 (A).
The Act, it stated, “does 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 may be mortgaged by local indigenous Nagas and in the event of a loan default the same may be auctioned by the banks to local indigenous Nagas alone and not to outsiders.”
It meanwhile stated that non implementation of the SARFAESI Act has become a hindrance for developing the state economy as there is no other way to mobilize capital without the banking institution playing its role.
“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. In the backdrop of such a scenario, the banks' hands are tied and they have literally stopped giving loans to local entrepreneurs and business houses,” it added.
