Nagaland government constitutes a state level committee on SARFAESI and credit mobilisation to address security enforcement, improve credit flow and strengthen loan facilitation in the state.
DIMAPUR — The Nagaland government has constituted a state level committee on SARFAESI and credit mobilisation to examine issues related to the enforcement of security interests and improve credit mobilisation in the state.
The committee was constituted by the Governor of Nagaland in pursuance of a decision taken at the State Level Bankers’ Committee (SLBC) meeting for the quarter ended March 2026, held on July 3, and as a follow-up to the North East Bankers’ Conclave (NEBC) 2.0, according to a DIPR report.
The committee will be chaired by the Finance Commissioner. Representatives of the Law & Justice department, Investment & Development Authority of Nagaland (IDAN) and SLBC will be members, while the Under Secretary, General Branch, Finance department, will serve as member secretary.
Representatives of SBI, Bank of Baroda, Nagaland Rural Bank, Nagaland State Cooperative Bank, UCO Bank, Canara Bank, Axis Bank, HDFC Bank and ICICI Bank will also be members. Representatives from NABARD, SIDBI and RBI, Kohima, will be special invitees.
A key focus of the committee will be to examine the legal position concerning the creation and enforcement of security interests in Nagaland under the SARFAESI Act, 2002, in light of Article 371(A) of the Constitution and the Supreme Court judgment in North Eastern Development Finance Corporation Ltd. v. M/s L. Doulo Builders and Suppliers Co. Pvt. Ltd., 2025 INSC 1446.
The committee will evaluate an Article 371(A)-compatible statutory security instrument and options for collateral substitution through guarantee cover and cash-flow appraisal.
It will recommend the instrument or combination of instruments considered suitable for Nagaland.
In consultation with the Law & Justice department, the committee will determine whether the recommended instrument requires a resolution of the Legislative Assembly, a state notification or an SLBC operating protocol, and prepare the necessary draft.
It will also seek the concurrence of SLBC member banks to accept the recommended documentation as valid security and credit-enablement documentation across the banking system in the state.
On credit mobilisation, the committee will activate state machinery for loan facilitation, including sponsorship, application readiness, guarantee tie-ups and last-mile follow-through under flagship credit-linked schemes.
The Chief Minister’s Micro Finance Initiative (CMMFI) will serve as a working template.
The committee will also recommend the design of a State Credit Guarantee (First-Loss Default Guarantee) Fund, covering aspects such as its corpus, coverage, trigger and exit terms.
The proposal will be placed before the Cabinet after testing its implications under the Fiscal Responsibility and Budget Management (FRBM) framework and assessing contingent liabilities.
It will further recommend a productive-credit sub-target of at least 50 percent of incremental credit as a formal SLBC performance metric.
The objective is to ensure that improvements in the state’s Credit-Deposit (CD) ratio are not driven solely by salary-backed personal lending.
The committee will also examine the possibility of linking government banking business to bank performance within the Reserve Bank of India’s agency-bank framework and place the proposed modality before the SLBC.
It may examine any other matter incidental to sound decision-making within its terms of reference.
The committee may also co-opt members, invite special invitees and constitute sub-groups to examine legal and credit mobilisation issues.
The committee has been tasked with submitting its report to the State Government within 90 days. Matters requiring approval will be placed before the competent authorities for consideration.