The Bhutanese Leading the way.
To enhance the developmental dimension and the creation of a more secure lending environment, the Royal Monetary Authority (RMA) launched Central Registry System for Secured Transaction (CRST) yesterday morning in Thimphu.
“The security on property can become a major element of the investment decision both for domestic and international investment of capital, in both mature and emerging market economics,” governor and chairman of RMA Daw Tenzin said.
“Central Registry System is a repository which houses the documentation related to a security agreement. It will act as a single, centralized repository for all security interests on moveable property. The system is designed and developed using a technology platform that will provide for online, real time registration and search based on web system,” he added.
Speaking on the mission of the launch, the governor said the registry system’s fundamental mission is to receive, maintain and disseminate information to enable financiers to make informed business decision. Such a system will also to protect the interests of financiers against subsequent creditors and the threat of bankruptcy of the debtor.
The main purpose of establishing the system is to provide notice to creditors who wish to extend credit to debtor and to determine the priority of conflicting claims over the same property subject to multiple security agreement.
“To add into the development dimension of the country and in-order to create a more secure lending environment, and thereby facilitate access to credit by small and medium enterprises (SME) which are vital for stimulating economic growth, RMA has established one more entity under its umbrella,” manager of Bhutan National Bank Limited (BNBL) Subedi said.
On the progress and development taking place in the country, Subedi said in terms of external front, the country has gained as a member of the international agencies and developmental partners as well in the internal front on new elected government and welcoming FDI (Foreign Direct Investment).
Highlighting RMA’s achievements, Subedi
said with establishments of projects and departments under the visionary leadership of the governor, there were many changes made in monetary policy that is most suitable, especially when the country is faced with a severe INR and liquidity crunch.
He also mentioned that in such a scenario, the Government of Bhutan has taken a bigger role by way of fiscal policy mainly through Ministry of Economic Affairs, Ministry of Agriculture and Ministry of Finance channeling resources into priority sectors like agriculture productivity for self-sufficiency.
The system is administrated as CRST over the moveable property under RMA where the secured party registers the notice of security interest over moveable property in the registry system to secure the performance of an obligation, usually the payment of a debt. It is established with the executive directive from Government of Bhutan in accordance with Part VI of Moveable and Immovable Property Act of Kingdom of Bhutan, 1999 and will be acting as a single, centralized repository for all security interest in moveable property.
The registry to CRST helps in increasing access to credit, decrease the cost of credit, allows for more types of movable goods to be used as collateral, gives lenders a greater certainty of where they stand in priority and allows access to information contained in the registry.
Types of goods that can be registered are motor vehicles, pledges of shares in listed public companies, crops, fixtures, timber to be cut, livestock and all other security interests in movable property.
The charge for the service ranges from Nu 50 to Nu 3,000 depending on the registrant that could be an individual, companies or joint owners and service type such as registration, amendments, continuation, discharge, search and loan amount slabs.
The event was presided over by the governor of RMA in the presence of the board of directors, chief executive officers of financial institutions, RMA directors, CRS project team, project committee members of CRS and local reporters.
CRST is launched with the assistance from the Asian Development Bank (ADB) at a cost of Nu 7mn which include procurement of Servers, network equipment, development of software and end user training.
