Negotiability of the Warehouse Receipt in the Context of Banking Reforms

Abstract

A number of commissions and committees were appointed by the Govt. of Indiafrom time to time for finding ways to reduce rural indebtedness. It was only afterthe All India Rural Credit Survey Committee had reiterated in 1954, the need forproviding warehousing in the public sector, that the concept of public warehousingtook a concrete shape. The term "Warehouse Receipt" has been defined in the StateWarehouses Acts which regulate the activities and running of public warehousesin the respective state. There has been no legal binding on Banking Institutionsto accept the Warehouse Receipt as a collateral security. The Reserve Bank ofIndia has been issuing directives from time to time about the advances against thepledge of the stocks covered by the Warepouse Receipts. The Government of Indiahaving seized of the issue, has recently brought out a Central Legislation for makingthe Warehouse Receipt a fully negotiable instrument.