State minister Ranjith Siyambalapitiya said Vehicles can be seized by Banks and leasing companies in the case of non-payment of dues only with the consent of the current owner of the vehicle.
He said that vehicles with defaulted installment payments are not seized under the Parate law.
The Minister said this in Parliament yesterday .
Minister Siyambalapitiya emphasized that under Parate powers, a bank or a financial institution can seize property only if the relevant loan amount exceeds Rs.5 million.
The percentage of non-performing loans in banks, which was 4.8 percent in January 2021, has increased to 13.4 percent by June 2023. He said that this is a very serious situation and in such a case, giving up the powers of parade is one of the main reasons for reducing the bank’s ability to recover its debts, and this raises the risk of the bank becoming bankrupt due to the increase in the credit risk of the bank.
According to the internal processes of the banks., debt recovery will be done through measures such as loan rescheduling after debt restructuring is inactive.The seizure of property under Parate’s powers is for customers who willfully default on their loans and entrepreneurs who have failed to recover these businesses at all.
