Security interests with STR: SBP asks banks, MFBs, DFIs for registration

The State Bank of Pakistan (SBP) has asked all the banks, microfinance banks and DFIs for registration of their security interests on movable assets of entities with Secured Transactions Registry (STR) under the Financial Institutions (Secured Transactions) Act, 2016.

According to SBP, with a view to provide for registration of charge on security/collateral offered by un-incorporated entities including sole proprietorships and partnerships and thereby enhancing their access to finance, The Financial Institutions (Secured Transactions) Act, 2016 (STA) was promulgated on July 1, 2016.

The Government of Pakistan has authorized the Securities and Exchange Commission of Pakistan (SECP) to operate Secured Transactions Registry (STR) to record statements in relation to security interests created by entities under STA.

Now, the SECP is going to launch the Secured Transactions Registry under the STA on April 27, 2020 for registration of security interests on movable assets of entities, other than companies. In view of this move, SBP has advised all the banks, microfinance banks and DFIs to register their security interests against movable assets of entities for future as well as prior security interests (i.e. security interests created before the operationalization of the STR as provided under section 73 of the STA) in the STR.