Dilly dallying in paying your car’s monthly instalment? We suggest you hurry up, because any furthey delay, and your bank may whisk away your car. The finance ministry and the RBI are in the process of finalising a proposal under which lenders will be authorised to re-possess vehicles if you fail to pay your EMI for two successive months.
It isn’t exactly breaking news to say that the auto sector has been going through harrowing times. Vehicle finance is hard to get, and almost 80 per cent of the industry is dependent on financing. With a few changes in lending policies, credit is sure to flow more easily. Delayed re-possession is more-or-less futile because a vehicle’s value depreciates very quickly. The above proposal will thus be welcomed by all auto co biggies.
A ministry official said that cars and two-wheelers may be brought under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. The Act empowers lending institutions to recover their non-performing assets without the involvement of courts.