The Ministry of Ports, Shipping, and Waterways is requesting the Finance Ministry’s support to modify the mortgage laws. This change aims to allow ships to be used as collateral for loans, reports the Economic Times.
Amending The SARFAESI Act
According to R Lakshmanan, Joint Secretary of the Ministry of Ports, Shipping and Waterways, currently, ships cannot be mortgaged due to restrictions imposed by the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act).
This means that lenders cannot seize and sell a ship to recover a loan if the borrower defaults. By amending the SARFAESI Act to permit ship mortgages, the government hopes to facilitate easier access to financing for the shipping industry. This could potentially boost investment in the sector and promote its growth.
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Source: Economic Times
