The cabinet division in principle has given its nod to allow tangible assets, such as savings certificates, fixed deposits, copyrights or even agricultural production, to be considered as collaterals when applying for a loan.
The Financial Institutions Division (FID) presented the Secured Transaction (Moveable Property) Act, 2022 with these provisions at a cabinet meeting held at the Parliament on Wednesday.
Prime Minister Sheikh Hasina, who chaired the meeting, gave her nod to the proposal.
Later in a briefing, cabinet secretary Khandker Anwarul Islam said that from now on, moveable properties could also be produced as collateral.
Even private cars can be mortgaged for loans. The bank will provide loans after examining the model number, value, loan tenure and its depreciation value," said the cabinet secretary.
Pointing out the act's purpose, Anwarul said many small and medium entrepreneurs cannot show fixed properties as collateral.
Replying to a query about many banks already giving loans against such collateral, the cabinet secretary said this practice will be brought under a legal framework through the act.