Sri Lanka

Sri Lanka enacted the Secured Transactions Act, No 49 of 2009. This was to facilitate the use of movables as collateral for financing (section 4). It applied to a wide range of security interests. The 2009 Act also provided for a Secured Transaction Registry.

This was not a wholesale reform of the law, and the 2009 legislation does not provide a number of important features which assist utilising movable property as good collateral for banks to lend against. For example, registration does not necessarily provide for effectiveness against third parties. Moreover, the current system of registration makes it difficult to see whether that property has already been used as collateral.

In June 2018, the Government of Sri Lanka announced plans to reform the 2009 Act by repealing and replacing it instead with a new draft bill. It is awaited to see what form this draft bill will take.

The 2009 Act is available here.

References:

https://news.lk/news/political-current-affairs/item/21032-secured-transactions-act-to-be-revised

http://www.ft.lk/financial-services/Empowering-small-businesses-through-secured-transactions-reform-that-improve-access-to-finance/42-652221

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