Important Topic: Negotiable Warehouse Receipts (NWRs)
Submitted by root on Fri, 04/13/2018 - 10:13
Important Topics for Competitive Exams
In India, the term ‘negotiable warehouse receipt’ is defined in Section 2(m) of the Warehousing (Development and Regulation) Act, 2007 (WDR Act), which came into force from 25 October 2010.
WDR Act provides for issuance of Negotiable Warehouse Receipts (NWRs) by the warehouses registered under this Act. Section 2(m) defines a “negotiable warehouse receipt" to mean a warehouse receipt under which the goods represented therein are deliverable to the depositor or order, the endorsement of which has the effect of transfer of goods represented thereby and the endorsee for which takes a good title;” It can be traded online.
Further NWRs issued by registered warehouses help farmers to seek loans from banks against NWRs. Negotiable warehouse receipts allow transfer of ownership of that commodity stored in a warehouse without having to deliver the physical commodity. These receipts are issued in negotiable form, making them eligible as collateral for loans.