Page 50 - Banking Finance July 2021

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already available in the field, under security interest shall be entitled to enforce securities under SARFAESI
details tab in entity identification number field. Act only if the security interest is filed with CERSAI.
VI. Filing of Security interest or attachment orders with
Recent changes in CERSAI CERSAI shall have priority over any subsequent security
Govt. of India vide notification dated 12th August, 2016 had interest created upon such property.
inserted Chapter IV -A in the SARFAESI Act, 2002. The same VII. After registration of security interest with CERSAI by
is in force from 24th January, 2020 as notified in secured creditors, their dues will be paid in priority over
Government of India Gazette No.4133 dated 26th Government dues.
December, 2019.The salient features of Chapter IV-A
includes: VIII. Penalty provisions for default in filing, modifying and
I. Creditors other than Secured Creditors (as defined under satisfaction of security interest (section 27) is no longer
section 2(1)zd of SARFAESI Act), in whose favour security applicable.
interest is created have to file the same with CERSAI. IX. 30-day time period for filing the transactions of
II. Filing of security interest with CERSAI shall be deemed creation/ modification of security interest with CERSAI
to constitute a Public notice from the date and time of (section 23) is no longer applicable.
filing with CERSAI.
Hence the new version of CERSAI has come up to overcome
III. Attachment orders issued by Revenue Authorities for
some technical flaws of the previous one. However, the
recovery of Govt. dues are required to be filed with benefits and major changes that CERSAI 2.0 has brought
CERSAI.
are yet to be seen.
IV. Attachment orders issued in favour of any person, by
Courts/Tribunals are required to be filed with CERSAI. References:
V. Secured Creditors [as defined under section 2(1)(zd)] CERSAI SITE www.cersai.org.in

India's bank credit-to-GDP ratio inches up to 56% in 2020

Notwithstanding incremental credit growth plunging to a 59-year low at 5.56 per cent in FY21, the bank credit-to-
GDP ratio rose to a five-year high of a little over 56 per cent in 2020, but way behind its peers and just half of the G20
average, according to the latest data from the Bank for International Settlements (BIS).
At 56.075 per cent credit-to-GDP ratio, total outstanding bank credit stood at USD 1.52 trillion in the country in 2020,
according to the BIS data for the year, but this is still the second lowest among all its Asian peers. And when it comes
to the emerging market peers, it is 135.5 per cent and at 88.7 per cent in advanced economies.

It can be noted that in spite of the massive credit-driven stimulus that the government tried to push to help tide over
the impact of the pandemic in 2020, incremental credit growth inched up only 5.56 per cent (at Rs 109.51 lakh crore),
which was the lowest recorded growth in 59 years when in FY1962 it was at 5.38 per cent.
Even in FY20, credit growth was at a 58-year-low at 6.14 per cent, an analysis by SBI Research showed recently.
According to analysts, bank credit growth is a key indicator of economic growth and a credit-GDP ratio of 100 per
cent is the ideal, which indicates robust demand for credit without the fear of a bubble in the making.
A higher credit-to-GDP ratio indicates aggressive and active participation of the banking sector in the real economy,
while a lower number shows the need for more formal credit. This is also a key reason for economists and analysts
calling for privatisation of state-run banks to increase credit growth.
At 56 per cent, the country's bank credit-to-GDP ratio is at a five-year high when in 2015 it stood at 64.8 per cent, yet
it is just over half of what G20 economies clocked last year.
As against this, the ratio for the other four BRICS members stood at the following: China-161.75 per cent, Russia-
88.12 per cent, Brazil-50.8 per cent, and South Africa at a low 40.1 per cent.

50 | 2021 | JULY | BANKING FINANCE