CRIB help for SMEs through new registry
Indunil Hewage
Credit Information Bureau of Sri Lanka announced the launch of its
Secured Transaction Registry (STR) to encourage prospective borrowers
particularly in Small and Medium Enterprises (SME) to seek loans from
banks using movable assets as security.
Central Bank of Sri Lanka Deputy Governor Priyantha Fernando
and officials at the launch of Secured Transaction Registry
(STR) . Picture by Ruwan de Silva |
Speaking at the launch of STR, Central Bank of Sri Lanka Deputy
Governor Priyantha Fernando said that STR is an electronic database
which contains required information related to a security agreement .
The main objective of the STR is to maintain a database accessible to
any interested party in verifying security interest in movable assets of
borrowers.
All the movable assets of prospective borrowers will be included into
the STR with their consent. It will assist creditors who wish to provide
credit to a debtor and determine the priority of contradictory claims
over the same property subject to multiple security agreement.
Under the security agreement, both creditor and debtor are subjected
to monetary obligation agreed by both parties and agreement houses
information related to the parties and the specific collateral secured.
It may also contain the terms and conditions of payment and amount
borrowed and other relevant data as stipulated by banking regulations.
Every time a transaction takes place relevant information will be
entered into the registry and this would create a source of accurate
information with a transparent function of the system.
“It is apparent that many banks are reluctant to grant loans using
movable assets as collateral since it is considered as a risky
procedure. With the introduction of STR, banks will be able to obtain
accurate information on movable assets of prospective borrowers through
STR and this will create more opportunities for banks to offer credit
with movable assets as collaterals.
Major clients of the STR would be banks, registered finance companies
and leasing companies.
In order to have a secure transaction system in Sri Lanka, STR and
Secured Transaction Act (STA) need to be implemented, at present, STR is
in place and STA has been approved in Parliament. STA is also expected
to be made operational by publishing a gazette shortly,” Fernando said. |