The Secure Transactions of (Moveable Assets) Bill, 2023 was placed in Parliament on Tuesday, aiming to bring movable property under the definition of collateral for bank loans.

Finance Minister AHM Mustafa Kamal placed the Bill and it was sent to the respective scrutiny committee for further examination. The Committee was asked to submit its report within 15 days.

If enacted the new law will bring a broader definition of collateral for bank loans.

As a result, not only the immovable property, but also fixed deposits or movable property like gold, silver, intellectual property can be taken as collateral for loans from banks, and financial institutions.

However, the movable property must be registered for a mortgage. For this purpose, it has been decided to have a separate authority for the registration of movable assets for which valuation of those is possible, mentioned in the proposed law.

As a result, both banks and borrowers will benefit, and providing loans will be easier, as stated in the text of the Bill.

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In order to borrow a certain amount of money from a bank or financial institution, a visible asset or equal value like land or building must be deposited or mortgaged in the bank.

With the new 'Secured Transactions' Bill, banks will be able to hold other floating assets to market value as collateral instead of tangible assets to borrow from banks.

As per the proposed law, from now on anyone can take loans against fixed deposits in banks, gold and silver or raw materials kept for export.

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Anything that is copyrighted can be pawned to the bank. Also, products like furniture, electronics, software, and apps can also be kept with the bank while taking loan, subject to pricing.

Besides, the bank will also give loans against fish in ponds, garden trees, and cattle.

The proposed law would pave the way for the small and medium-level entrepreneurs to take bank loans.