The Governor of Nagaland has constituted a State Level Committee on SARFAESI and Credit Mobilisation to examine issues relating to security interest and the enforcement of the SARFAESI Act, 2002, while also strengthening credit flow and loan facilitation across the State.
The committee has been constituted in pursuance of the decision taken during the State Level Bankers’ Committee (SLBC) meeting for the quarter ended March 2026, held on July 3, 2026, and as a follow-up to the North East Bankers’ Conclave (NEBC) 2.0.
The Committee will be chaired by the Finance Commissioner, Government of Nagaland. Representatives from the Law & Justice Department, Investment & Development Authority of Nagaland (IDAN) and SLBC will be members.
Representatives from 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. The Under Secretary, General Branch, Finance Department, will serve as Member Secretary, while representatives from NABARD, SIDBI and RBI, Kohima, will be special invitees.
The committee will focus on two broad areas—security interest and the SARFAESI Act, 2002, and credit mobilisation.
On security interest, the Committee will examine the legal position relating to the creation and enforcement of security interest in Nagaland under the SARFAESI Act 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.
It will also evaluate an Article 371(A)-compatible statutory security instrument and options for collateral substitution through guarantee cover and cash-flow appraisal. The committee will recommend the instrument, or combination of instruments, considered most suitable for Nagaland.
In consultation with the Law & Justice Department, the Committee will determine whether the recommended mechanism would require a resolution of the State Legislative Assembly, a State notification or an SLBC operating protocol, and prepare the corresponding draft.
The Committee will further seek the concurrence of SLBC member banks on accepting the recommended documentation as valid security and credit-enablement documentation across the banking system in Nagaland.
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On credit mobilisation, the committee will work towards activating State machinery for loan facilitation, including sponsorship, application readiness, guarantee tie-ups and last-mile follow-up under flagship credit-linked schemes. The Chief Minister’s Micro Finance Initiative (CMMFI) will serve as a working template in this regard.
The Committee will also recommend the design of a State Credit Guarantee Fund based on a First-Loss Default Guarantee model. The recommendation will cover the corpus, coverage, trigger and exit terms and will be placed before the Cabinet after examination of fiscal responsibility and budget management (FRBM) and contingent-liability implications.
Another key proposal is a productive-credit sub-target of not less than 50 per cent of incremental credit as a formal SLBC performance metric. The objective is to ensure that improvement in the Credit-Deposit (CD) ratio is not driven primarily by salary-backed personal lending, but also reflects productive lending.
The Committee will additionally examine the linkage of 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 also examine any other matter incidental to sound decision-making within its terms of reference, and has the authority to co-opt members, invite special invitees and constitute sub-groups on legal and credit mobilisation matters.
The Committee has been mandated to submit its report to the State Government within 90 days and, on matters requiring approval, seek clearance from the competent authorities.
