Harsh provisions of the Securitisation Act are killing entrepreneurial activity and might hinder industrial growth, according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry.
At this stage of development in the country, dynamic entrepreneurship could lead to higher growth and the concerns expressed over the provisions of the Securitisation Act would be taken up with the government, FICCI secretary general Amit Mitra said after the release of a survey on Indian banking system in Mumbai on Tuesday.
Over 50 per cent of respondents felt that provisions of the Act failed to make distinction between intentional and unintentional defaulters.
The provision putting obligation on borrowers to discharge liabilities within 60 days of the notice was "too harsh" and needs to be reviewed, the survey said.
Fear psychosis among bankers to settle debt at a price lower than the book value could impact the independent decision-making process, it said.